Innovating for People Like Me: Evidence from Female-Founded Consumer Packaged Goods Startups

41 Pages Posted: 24 May 2019

See all articles by Josh Feng

Josh Feng

University of Utah - David Eccles School of Business; National Bureau of Economic Research

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics

Date Written: May 29, 2019

Abstract

Women are under-represented among startup founders, patent inventors, and venture capitalists. This paper investigates how different consumers may be affected by women's under-representation among innovation leaders. Using scanner data for consumer-packaged goods linked to databases on startups, patents, and venture capitalists, we find that female consumers are significantly more likely to purchase products from startups that were founded by female entrepreneurs, hire female inventors and/or are backed by a female venture capitalist. Within narrow product categories, the share of sales to female consumers is about 20% larger for a company founded by a female entrepreneur, relative to a male-founded startup. These findings suggest that an entrepreneur's gender matter for the direction of entrepreneurship/innovation, in contrast with standard models of entrepreneurship. We suggest various channels that can account for the observed patterns. Our findings suggest that unequal access to entrepreneurship may have substantial distributional effects. In a simple calibration based on love-of-variety in a CES framework, we find that, compared with a male-led startup, a female-led startup generates welfare gains for female consumers that are 27% larger than for male consumers. Beyond gender, we document that consumer characteristics are systematically related to other socio-demographic characteristics of founders, including parent income and age.

Keywords: Entrepreneurship, Innovation, New Goods, Product Variety, Economics of Ideas

JEL Classification: O30, L26, J16

Suggested Citation

Feng, Josh and Jaravel, Xavier, Innovating for People Like Me: Evidence from Female-Founded Consumer Packaged Goods Startups (May 29, 2019). Available at SSRN: https://ssrn.com/abstract=3383703 or http://dx.doi.org/10.2139/ssrn.3383703

Josh Feng (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
2016977982 (Phone)

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
7456842728 (Phone)
NW12AR (Fax)

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