Effects of Gender Disparity and Social Costs of Failure on Entre- preneurship Across Countries
Sharon A. Simmons, Chong Kyoon Lee, Susan L. Young, andMaQuebaMassey
Coles Working Paper Series, SPRING21-03, March 2021
Overview Many studies have examined the effect of institutional environments on women’s entrepreneurial activity. However, none captures the effect of such nuanced institutional arrangements as the social costs of failure , defined as the formal and informal representations of expected conduct with anticipated negative consequences for nonconformity when a business effort falls through. The impact of this multi- dimensional concept may contribute to the gaps between men and women’s economic participation and opportunity, educational attainment, health, and political empowerment across countries. Meanwhile, gender disparities are considered barriers to economic development and high-growth entrepreneurship, while fear of being subjected to the social costs of failure is argued to motivate high-growth aspirations. Therefore, we ask, how do gender disparities and the social costs of failure, independently and in concert, affect women’s entrepreneurship, especially high-growth entrepreneurship, across countries? Using an institutional legitimacy framework to study 262,000 individuals across 35 countries, we find that societies with smaller gender disparities have higher total levels of entrepreneurial activity and aspirations for growth, but higher social costs of failure weaken these gains. Our study contributes to scholarly conversations on institutional legitimacy, cultural institutions, women entrepreneurs, and high-growth entrepreneurship. It informs the quality vs. quantity debate, supporting the strong need for national policies to address the institutional drivers of women’s engagement in entrepreneurial projects with high-growth potential.
28 | Working Papers
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