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The Impact of Financial Capital on Business Performance: A Comparison of Women- and Men-Owned Firms

28 Pages Posted: 7 May 2009  

Alicia Robb

University of Colorado at Boulder; Next Wave Impact

Susan Coleman

University of Hartford - Barney School of Business

Date Written: May 7, 2009

Abstract

This article uses data from the Kauffman Firm Survey to explore, by gender, the relationship of start up capital for new firm performance in terms of assets, revenues, income, employment, and survival. Our results reveal that, consistent with prior research, women-owned firms start with smaller amounts of capital than men-owned firms. Our findings also indicate that women launched their firms with larger amounts of owner-provided equity and dramatically smaller amounts of outsider equity. Finally, our results reveal that, even controlling for firm size and the amount of capital at start-up, women-owned firms still underperformed firms owned by men in measures of size, profitability, employment, and survival over time. This finding suggests that differences in financial capital are just one factor associated with the gender differences in the performance outcomes of new firms.

Keywords: women, financing, startups

JEL Classification: J16, M13

Suggested Citation

Robb, Alicia and Coleman, Susan, The Impact of Financial Capital on Business Performance: A Comparison of Women- and Men-Owned Firms (May 7, 2009). Available at SSRN: https://ssrn.com/abstract=1400742 or http://dx.doi.org/10.2139/ssrn.1400742

Alicia Robb (Contact Author)

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO 80309
United States

Next Wave Impact ( email )

7455 Park Lane Road
Longmount, CO 80503
United States

Susan Coleman

University of Hartford - Barney School of Business ( email )

200 Bloomfield Ave
West Hartford, CT 06117
United States
(860) 768 4690 (Phone)

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