The Minority Effect: Gender Stereotypes and Entrepreneur Financing

82 Pages Posted: 24 Jan 2019 Last revised: 3 Dec 2019

See all articles by Camille Hebert

Camille Hebert

University of Toronto - Rotman School of Management

Date Written: December 1, 2019

Abstract

Using administrative and survey-based microdata of start-ups in France, I examine gender differences in the external equity financing of entrepreneurs. First, I find evidence of a heterogeneous gender funding gap across sectors: female entrepreneurs are less likely to use external equity in male-dominated sectors, which represent most of the economy, but they are more likely to use external equity in female-dominated sectors. The observed gender funding gaps are not driven by the composition of founding teams or by differences across individuals regarding education, experience, ex-ante motivations or optimism. Second, consistent with the idea that the bar is set higher for minorities, I find that conditional on being backed with equity, female entrepreneurs overperform in male-dominated sectors and male entrepreneurs overperform in female-dominated sectors. The evidence is consistent with a simple model in which investors have context-dependent stereotypes.

Keywords: Entrepreneurs, venture capital, gender discrimination, beliefs, stereotypes

JEL Classification: G24, G41, J16

Suggested Citation

Hebert, Camille, The Minority Effect: Gender Stereotypes and Entrepreneur Financing (December 1, 2019). Available at SSRN: https://ssrn.com/abstract=3318245 or http://dx.doi.org/10.2139/ssrn.3318245

Camille Hebert (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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