Leveraging entrepreneurship through private investments: does gender matter?
- 652 Downloads
Using project data from a random sample of Phase II research awards from the National Institutes of Health SBIR program, we estimate the relative probability that woman-owned firms are able to attract private investments to fund the transition of the technology developed under the sponsorship of the SBIR program to an innovation to enter the market. We find that women-owned firms are as much as 16% points less likely to attract private investment dollars compared to male-owned firms, factors excluding the size of the SBIR award held constant. Women-owned firms that received larger awards performed substantially better. Although the SBIR program has a legislated directive to increase the participation of woman-owned firms in the program, our findings suggest that it might not be sufficient to overcome market perceptions about the profitability of such investments actually bringing a developed technology to market.
KeywordsInnovation Entrepreneurship SBIR program Venture capital Gender discrimination
JEL ClassificationsO31 L26 J16 G11
This paper has benefitted from the comments and suggestions of Steve Bendar, Barry Hirsch, Donald Siegel, Mike Wright, and anonymous referees.
- Aldrich, H. E. (1989). Networking among women entrepreneurs. In O. Hagen, C. Rivchum, & D. Sexton (Eds.), Women-owned businesses (pp. 103–132). New York: Praeger.Google Scholar
- Brana, S. (2011). Microcredit: An answer to the gender problem in funding? Small Business Economics. doi: 10.1007/s11187-011-9346-3.
- Branscomb, L. M., & Auerswald, P. E. (2002). Between invention and innovation: An analysis of funding for early-stage technology development. NIST GCR 02–841. Washington, DC: U.S. Department of Commerce.Google Scholar
- Brush, C. G., Carter, N., Gatewood, E., Greene, P. G., & Hart, M. M. (2001). An investigation of women-fed firms and venture capital investment. Final Report submitted to the U.S. Small Business Administration, Office of Advocacy.Google Scholar
- Ehlers, V. J. (1998). Unlocking our future: Toward a new national science policy. Washington, DC: U.S. House of Representatives, Committee on Science.Google Scholar
- Executive Office of the President. (2011). Report to the President on ensuring American leadership in advanced manufacturing. Washington, DC: President’s Council of Advisors on Science and Technology (PCAST).Google Scholar
- Fairlie, R., & Marion, J. (2010). Affirmative action programs and business ownership among minorities and women. Small Business Economics. doi: 10.1007/s11187-010-9305-4.
- Gompers, P., & Lerner, J. (2004). The venture capital cycle. Cambridge: MIT Press.Google Scholar
- Hébert, R. F., & Link, A. N. (2009). A history of entrepreneurship. London: Routledge.Google Scholar
- Lerner, J., & Kegler, C. (2000). Evaluating the small business innovation research program: A literature review. In C. W. Wessner (Ed.), The small business innovation research program: An assessment of the department of defense fast track initiative (pp. 307–324). Washington, DC: National Academy Press.Google Scholar
- Link, A. N., & Scott, J. T. (2011). Employment growth from public support of innovation in small firms. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.Google Scholar
- Link, A. N., & Welsh, D. B. (2011). From laboratory to market: On the propensity of young inventors to form a new business. Small Business Economics. doi: 10.1007/s11187-011-9345-4.
- National Venture Capital Association. (2011). Yearbook 2011. Arlington, VA: National Venture Capital Association (NVCA).Google Scholar
- Nelson, R. R. (1982). Government stimulus of technological progress: Lessons from American history. In R. R. Nelson (Ed.), Government and technical progress. New York: Pergamon.Google Scholar
- Schumpeter, J. A. (1934). The theory of economic development. Cambridge: Harvard University Press.Google Scholar
- Sundén, A. E., & Surette, B. J. (1998). Gender differences in the allocation of assets in retirement savings plans. American Economic Review Papers and Proceedings, 18, 201–211.Google Scholar
- Van der Zwan, P., Ingrid Verheul, I., & Thurik, R. A. (2011). The entrepreneurial ladder, gender, and regional development. Small Business Economics. doi: 10.1007/s11187-011-9334-7.
- Wessner, C. W. (2007). SBIR and the Phase III challenge of commercialization: Report of a symposium. Washington, DC: National Research Council.Google Scholar
- Wessner, C. W. (2009). An assessment of the SBIR program. Washington, DC: National Research Council.Google Scholar