Does gender matter for job creation? Business ownership and employment growth

Abstract

This research uses an economic growth framework to analyze the impacts of male- and female-owned firms on economic performance. To address the potential endogeneity caused by social factors that may effect both the gender composition of business owners and economic growth, we apply an instrumental variable strategy. Intriguingly, in-depth analysis yielded no evidence of positive agglomeration effects on job growth specifically from gendered measures of firm density. However, the analyses do illuminate the value of considering both the previously unexplored employer/nonemployer firm distinction as well as a gendered perspective of firm ownership in the understanding of regional growth factors. The results show that male-owned firms, particularly male-owned employer firms, have a strong, though negative, relationship to employment growth consistent with national employment trends in male-owned firms during the period of the study.

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Notes

  1. 1.

    Prior to 2007, male-owned firms were not tabulated by the Census. Only female-owned firms and the total number of firms were counted. The number of male-owned firms is calculated as the total number of firms less female-owned firms. A firm is female-owned if women control 51 % or more of the stock or equity in firm. Alternatively, densities are calculated as the ratio of the number of firms owned by each gender to the land area of each county. Those results can be found in the “Appendix”.

  2. 2.

    The data we use from the Survey of Business Owners has the essential gender stratification for this study, but not size detail beyond the employer/nonemployer categories. Thus we cannot restrict the sample using a size threshold as in some studies of small businesses. However, national level data suggest that large companies represent a very small share of firms. For example, based on data from the Nonemployer Statistics and County Business Patterns, in 1997 less than 1.6 % of firms had 50 or more employees and less than 0.1 % had over 500 employees. Thus, it seems unlikely that such a small number of large firms unweighted by sales or employment would severely bias the results at the county level.

  3. 3.

    We did consider total firm density reported in the appendix. The variable is negative and significant in the OLS and FE regressions, then positive using instrumental variables but only significant without fixed effects. See Table 9 for results.

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Correspondence to Tessa Conroy.

Appendix

Appendix

See Tables 7, 8, 9 and 10.

Table 7 Results: employer firms
Table 8 Results: nonemployer firms
Table 9 Employment growth, gender-blind
Table 10 Employment growth, alternative calculation for density

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Conroy, T., Weiler, S. Does gender matter for job creation? Business ownership and employment growth. Small Bus Econ 47, 397–419 (2016). https://doi.org/10.1007/s11187-016-9735-8

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Keywords

  • Gender
  • Entrepreneurship
  • Growth
  • Employment
  • Employer
  • Nonemployer

JEL Classifications

  • L26
  • R11