“Does Gender Matter?”
Small Business Economics
16: 329–345, 2001.
2001 Kluwer Academic Publishers. Printed in the Netherlands.
ABSTRACT. Female and male entrepreneurs differ in the
way they finance their businesses. This difference can be
attributed to the type of business and the type of management
and experience of the entrepreneur (indirect effect). Female
start-ups may also experience specific barriers when trying to
acquire start-up capital. These may be based upon discrimi-
natory effects (direct effect). Whether gender has an impact
on size and composition of start-up capital and in what way,
is the subject of the present paper. The indirect effect is
represented by the way women differ from men in terms of
type of business and management and experience. The direct
effect cannot be attributed to these differences and is called
the gender effect. We use of a panel of 2000 Dutch starting
entrepreneurs, of whom approximately 500 are female to test
for these direct and indirect effects. The panel refers to the
year 1994. We find that female entrepreneurs have a smaller
amount of start-up capital, but that they do not differ
significantly with respect to the type of capital. On average
the proportion of equity and debt capital (bank loans) in the
businesses of female entrepreneurs is the same as in those of
their male counterparts.
Developed countries are undergoing a fundamental
shift away from a managed economy and toward
an entrepreneurial economy (Audretsch and
Thurik, 2001). Economic activity is moving from
large, incumbent firms toward small, new ones.
There is a growing literature about how and why
the developed countries are undergoing this
fundamental shift (Brock and Evans, 1989;
Admiraal, 1996; Audretsch and Thurik, 2000).
The speed of this industrial transformation
process has varied considerably across countries
and industries (Carree et al., 2001; Thurik, 1999).
Increasingly, evidence becomes available that this
transformation has to be promoted (Gavron et al.,
1998). Empirical evidence shows that those coun-
tries and industries that are lagging behind in this
process experience lower growth and productivity
levels and higher levels of unemployment (Thurik,
1996; Carree and Thurik, 1999; Audretsch and
Entrepreneurship seems to be a driving force in
economic development. However, entrepreneur-
ship itself cannot be a determinant of growth. It
is an ill-defined, at best multidimensional concept.
Understanding its role requires the decomposition
of the concept (Wennekers and Thurik, 1999).
Dimensions of entrepreneurship are smallness,
competition, deregulation, innovation, co-opera-
tion, variation, turbulence and motivation
(Audretsch and Thurik, 1999, 2001). Deregulation
and variation are essential dimensions. Low
barriers should enable a broad variety of entre-
preneurs to enter the market. Diversity in terms
of products, processes, forms of organisation and
targeted markets should leads to a selection
process where customers are at liberty to choose
according to their preferences.
This process where entrepreneurs seek for
better products, processes, forms of organisation
and markets can only thrive under enabling rather
that constraining public policies (Audretsch and
Thurik, 2001). Therefore, it is important that all
potential entrepreneurs are able to play a role in
securing maximum diversity and in taking
maximum advantage of free competition. No
group of potential entrepreneurs should experience
any barrier for starting or developing a business.
From this perspective it is worth noting that
female entrepreneurs are still underrepresented.
The desire of women to be economically inde-
pendent leads to their increasing participation in
the labour market and an increasing number of
Centre for Advanced Small Business Economics
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