Women who choose women

TO BRIDGE THE GENDER GAP, SYSTEMIC SOLUTIONS ARE NEEDED IN ALL AREAS. A STUDY ANALYZES THE SELECTION OF STARTUPS FOR ACCESS TO ACCELERATION PROGRAMS

by Nilanjana Dutt, Dept. of Management and Technology

Scholars and practitioners alike are concerned with the economic and societal consequences of the gender gap. While the past decades have seen an improvement along some dimensions of the gender gap, Covid-19 has ravaged economies across the globe and set advances in the gender gap back decades. This trend is, unfortunately, mostly true independent of the geographic location of focus, the industry, or the nature of the work.
While this turn of events illustrates a worsening view of global economies and work cultures, it highlights the need for systemic solutions to reduce the gender gap. Prior research across the domains of economics, sociology, management, political science, and critical theory has carefully measured the presence of a gender gap in the economy. This gap exists when we look at inputs, such as participation in jobs and in entrepreneurship. As well as in outputs such as promotions, salaries, and entrepreneurial success. Along some dimensions--such as entry into entrepreneurship and raising venture capital funding--the gender gap is large, even in developed economies.

Although the scale of the gender gap problem is well-recognized by researchers, and its consequences are well recognized by policymakers and practitioners, solutions are scant. Most proposed solutions that have shown some reduction in the gender gap put the onus on women workers and entrepreneurs to reframe their businesses or hide their gender. Instead, we argue that sustainable solutions need to be systemic. More specifically, we need to test for and develop systemic changes to how women are induced to participate in and benefit from work.

In an ongoing project co-authored with Sarah Kaplan, we test for a possible solution to the gender gap in entrepreneurship. Using the context of social-innovation accelerator programs, we consider how improved representation of women on selection committees could reduce the gender gap at the entry to entrepreneurship. In particular, better women's representation on selection committees should yield better selection outcomes for women entrepreneurs.

Theoretically, the idea that representation should improve outcomes for a minority group is well-established. Yet, empirical research on this topic is relatively mixed. Some studies suggest that representation only helps if it is above a "critical mass" threshold. Other studies have shown that non-minority members of the selection committee may change their behavior as the share of minority members increases. Moreover, minority members are not selected randomly, which can influence the extent to which they may behave differently from others on the selection committee.

Our results so far are mixed. Accelerators with higher shares and numbers of women selectors select more women entrepreneurs. Yet such committees tend to be larger, and larger committees are more selective. Because women applicants tend to apply to programs with these larger, more gender-diverse groups of selectors, the accelerators reject women at a higher rate than comparable men. The net effect is that there are no improvements in terms of the gender gap.

Although we cannot measure them, it is worth considering the consequences of this finding. On the one hand, this means that accelerators may be foregoing the financial and philanthropic benefits that they might have gained from these women-led ventures. On the other hand, this result suggests there are significant drawbacks to such programs' selection processes. These findings highlight the need to identify multiple systemic interventions to address this social challenge and identify one explanation for why the gender gap in entrepreneurship persists.