Working Paper No. 521

Testing the Female Underperformance Hypothesis

Published: October 15, 1999Pages: 14Keywords: Entrepreneurship; Enterpreneurial Performance; Female Entrepreneurs; Female Underperformance; Gender Economics; Small Business Growth; Women Business OwnersJEL-codes: D21; D92; J16; L11; M13

Testing the Female Underperformance Hypothesis Anita Du Rietz and Magnus Henrekson

Most previous studies have found evidence at the aggregate level that female entrepreneurs underperform relative to their male counterparts. This study conducts a comprehensive test of this finding. The test is conducted on a large Swedish sample of 4200 entrepreneurs (405 females) with 1 to 20 employees in all sectors of the economy. Our study confirms the results of several previous studies that female entrepreneurs tend to underperform relative to men when the data is examined at the most aggregate level. At the same time our data reveals sharp structural differences between male and female entrepreneurs. In an extensive multivariate regression with a large number of controls it turns out that female underperformance disappears for three out of four performance variables. The only exception is sales. No gender difference is found for profitability. A more detailed analysis reveals that the evidence of female underperformance is much weaker in larger firms and nonexistent in firms with only one employee. If it is true that female entrepreneurs on average have weaker preferences for sales growth, while we consistently find that they do not underperform in terms of profitability, our study provides no support for female underperformance given differences in preferences.

Magnus Henrekson


Ph: +46 (0)8 665 4502

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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