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Entrepreneurship by gender: characteristics, financing, and growth




Conroy, Tessa, author
Weiler, Stephan, advisor
Bernasek, Alexandra, committee member
Mushinski, David, committee member
Thilmany, Dawn, committee member

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Women own less than one-third of firms in the United States, despite comprising nearly half of the labor force. The gender gap holds in most local areas, but analysis by county shows that there is significant variation in male- and female- business ownership across space. Though previous studies link entrepreneurial activity to several important regional characteristics, none consider how the impact of these characteristics, particularly the availability small business financing, might vary between men and women. Further, there has been little consideration for separate impacts of male- and female-owned firms on economic growth. Chapter one identifies the determinants of growth in the propensity for male- and female-owned firms and considers the relative importance of endowment and behavioral differences in explaining the gender gap in business ownership. The results indicate that there are significant endowment and behavioral differences between the male and female populations, particularly with regard to human capital accumulation. Human capital accumulation at the bachelor's degree level increases the propensity for male-owned firms, but the relationship between human capital accumulation and the propensity for female-owned firms forms an inverted "U." Counties with large shares of females at very low and very high education attainment have lower growth in the propensity for female-owned firms, and growth is highest in counties with a large share of female college graduates. Family structure is also a significant factor, shown by the negative effect of the number of children per adult, which is much stronger for males. A Blinder-Oaxaca decomposition demonstrates that though the effect of endowment differences is larger in absolute value, the behavioral differences captured by the coefficient effect, are key to alleviating the gender disparity in business ownership. Chapter two analyzes the impact of male- and female-owned firms on economic performance. The results show that counties with higher initial densities of male- and female-owned firms, generally have lower subsequent employment growth. More detailed analysis by employment status shows that male-owned employer firms have the strongest relationship to economic growth compared to female-owned employer firms and non-employer firms owned by either gender. Instrumental variable analysis using the historical mining industry addresses the potential endogeneity created by including births in the empirical model of employment growth. Chapter three focuses on capital as an especially important input to entrepreneurship, and ultimately, to economic growth. So far as bank loans are critical to the start-up, survival, and expansion of establishments, it is reasonable to expect spatial linkages between lending and establishment births as well as between lending and economic performance. This study examines the effect of small business loans based on Community Reinvestment Act (CRA) data and applies an instrumental variable strategy using money demand shocks to address potential endogeneity between lending and establishment births. Using an economic growth framework and cross-sectional empirical model for U.S. counties, we test the hypotheses that the establishment birth rate, employment growth, and our measure of entrepreneurship for each gender is higher in counties where bank financing is more available, controlling for community-level characteristics affecting business and economic dynamics. We also consider the long-term effect of small business lending and focus on establishing the appropriate lag structure. The results indicate that lending has a significant and positive effect on births that is strongest in rural and micropolitan counties. Second, increases in lending appear to have a weakly negative effect on employment growth. There is no effect of lending on entrepreneurship for either gender.


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