Two-sided Discrimination in an Entrepreneurial Financing Setting: Experimental and Theoretical Evidence

69 Pages Posted: 4 Apr 2022 Last revised: 22 Dec 2023

See all articles by Junlong Feng

Junlong Feng

Hong Kong University of Science & Technology (HKUST)

Ye Zhang

Stockholm School of Economics - Finance Department

Weijie Zhong

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Ofir Gefen

Hong Kong Polytechnic University - School of Accounting and Finance

Date Written: March 23, 2022

Abstract

To explain the unique persistent gender gap in the US entrepreneurial community, this paper conducts an experiment with real US startup founders. Results show that male entrepreneurs have implicit gender discrimination against female investors due to statistical discrimination. The discrimination is more salient among high-quality and senior investors, suggesting the existence of a glass ceiling for women. However, Asian investors do not suffer from a similar level of discrimination. We further provide a theoretical framework to explain several novel findings in recent experiments and demonstrate how two-sided gender discrimination perpetuates a persistently low female participation rate in entrepreneurial financing settings.

Keywords: Matching, Discrimination, Field Experiments, Venture Capital, Entrepreneurship

JEL Classification: C78, C93, D83, G40, G24, J15, J16, J71

Suggested Citation

Feng, Junlong and Zhang, Ye and Zhong, Weijie and Gefen, Ofir, Two-sided Discrimination in an Entrepreneurial Financing Setting: Experimental and Theoretical Evidence (March 23, 2022). Available at SSRN: https://ssrn.com/abstract=4065009 or http://dx.doi.org/10.2139/ssrn.4065009

Junlong Feng

Hong Kong University of Science & Technology (HKUST)

Ye Zhang (Contact Author)

Stockholm School of Economics - Finance Department ( email )

Stockholm
Sweden

HOME PAGE: http://https://www.yezhang.space/

Weijie Zhong

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

HOME PAGE: http://www.columbia.edu/~wz2269

Ofir Gefen

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

Hung Hom
Kowloon
Hong Kong

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