Gender Gaps and Reentry Into Entrepreneurial Ecosystems After Business Failure

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Table of Contents

Article description
Addressed Gaps in the Literature
Ideas and Arguments Found Stimulating
Questions and Concerns with the Main Claims
Similarities and Disagreements Reported in The Literature
Future Research Directions
A Recent Work Missing
References

Article description

The study by Simmons et al. (2019) investigated whether there was a gender gap in entrepreneurs’ reentry decisions after a business failure. The researchers used a sample of 8171 entrepreneurs with business failure experiences coming from 35 countries. The researchers found that women were less likely to enter business than men regardless of whether it was the initial entry or reentry after entrepreneurial failure. Another finding was that the public stigma of business failure increased the gender gap in reentry decisions. Finally, the researchers discovered that high public fear of business failure decreased the odds of reentry for both male and female entrepreneurs, but the decline for females was greater. The study contributes to the literature by emphasizing the elements of entrepreneurial ecosystems that may hinder entrepreneurs’ reentry intentions and providing directions for future research in the field of entrepreneurship. The research also has policy implications, underlining the need for community support of entrepreneurs.

Addressed Gaps in the Literature

During their literature review, Simmons et al. (2019) found that prior research revealed the influence of formal and informal norms existing in an ecosystem on entrepreneurs’ decisions to enter, exit, and reenter business. The researchers aimed to expand this body of knowledge by investigating how environmental conditions affected the personal cost of entrepreneurial failure. Simmons et al. (2019) focused on such environmental factors as the public stigma of business failure, which was a formal norm supported by national laws, and public fear of failure, which was an informal norm. The researchers also discovered that the question of entrepreneurial ecosystem diversity was understudied, so they decided to explore how differently the aforementioned environmental factors affected males and females in their response to business failure.

Ideas and Arguments Found Stimulating

The first argument found stimulating is a quote retrieved from a study investigating the gender differences in business entry motivations. It said, “If a man fails, people sympathize. If a woman fails, people ridicule” (Simmons et al., 2019, p. 520). This quote suggests that gender stereotypes persist in modern society and discourage women from entering the business. As a result, the world loses potential female entrepreneurs who might have valuable business ideas but refrain from realizing them because of stereotypes. Another argument found stimulating is that public and private communities can reduce the effects of gender stereotypes by providing equal nonmonetary support to female and male entrepreneurs. This idea is important because it suggests directions for entrepreneurial policies.

Questions and Concerns with the Main Claims

The authors’ first claim is that formal and informal ecosystem factors influence entrepreneurs’ decisions. However, the researchers expressed concerns about the level of analysis – national, regional, or local – that would be the most appropriate for investigating this question (Simmons et al., 2019). Another claim made by the researchers is that there are gender disparities affecting entrepreneurs. The authors wondered whether the chance of reentry after business failure was lower for female entrepreneurs than for their male counterparts and whether public stigma increased gender gaps between reentering male and female entrepreneurs. Another question was whether public stigma increased gender gaps in entrepreneurial reentry decisions more when public fear of entrepreneurial failure was low. Finally, one concern with the authors’ claim is that, without shifts in entrepreneurial policies and public attitudes, gender gaps in business entry and reentry are likely to persist.

Similarities and Disagreements Reported in The Literature

The authors reported on the differences between female and male entrepreneurs’ business experiences and decisions. The first difference is the motivation to start an entrepreneurial career. Male entrepreneurs value status and enter the business to achieve this status, while their female counterparts are more concerned about employee and customer relationships (Simmons et al., 2019). As a result, female entrepreneurs have more barriers to entry since they can be afraid of damaging relationships with their employees and customers.

Another difference was concerned with access to resources at every stage of business setup. Simmons et al. (2019) report that it is more difficult for females to get human, financial, and social capital both at the founding stage and at later stages of their entrepreneurial career. Further, society is more forgiving toward male business failure than that females (Simmons et al., 2019). Female business failure is often perceived as a confirmation of gender stereotypes about women’s work roles. Simmons et al. (2019) state one similarity in reentry decisions of males and females. They argue that high public stigma and high public fear of failure reduce entrepreneurial reentry intentions in both men and women.

Future Research Directions

The study suggests that future research should focus on diversity in the entrepreneurial environment by exploring how environmental factors affect the entrepreneurial decisions of minorities, youth, or immigrants. Simmons et al. (2019) also note a lack of a unifying theory of entrepreneurial ecosystems, so they call on scholars to develop such a theory that would analyze entrepreneurial ecosystems at national, regional, and local levels. Finally, future studies further explore gender inequalities in the entrepreneurial environment, particularly the interaction of gender disparities at national and individual levels.

A Recent Work Missing

A recent study conducted by Wannamakok and Chang (2020) explored the influence of perceptual and cognitive factors on women’s decision to start an entrepreneurial career. The factors that the researchers investigated included fear of failure, role models, entrepreneurial knowledge, and opportunity recognition. Wannamakok and Chang (2020) found that the existence of role models, entrepreneurial knowledge, and opportunity recognition encouraged women to enter an entrepreneurial career, while fear of failure did not significantly influence their entrepreneurial intentions. Like, Simmons et al. (2019), Wannamakok and Chang (2020) recognized the negative influence of gender-stereotyped culture on female participation in entrepreneurship and suggested policy shifts that would eliminate gender disparities.

References

Simmons, S. A., Wiklund, J., Levie, J., Bradley, S. W., & Sunny, S. A. (2019). Gender gaps and reentry into entrepreneurial ecosystems after business failure. Small Business Economics, 53, 517–531. Web.

Wannamakok, W., & Chang, Y.-Y. (2020). Understanding nascent women entrepreneurs: an exploratory investigation into their entrepreneurial intentions. Gender in Management: An International Journal, 35(6), 553–566. Web.

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