The impact of female entrepreneurship on a country’s innovative performance

Abstract: Purpose – As entrepreneurship is still a traditionally male-dominated field, more research and political initiative is needed to create a level-playing field between women and men in this industry. The purpose of this research, therefore, is to first understand how female entrepreneurship (FE) influences innovation performance (IP) now, and how this effect has changed over time. Moreover, different factors that might have an influence on the relationship are analyzed. Research Problem – Whereas the interest in and research on FE has been growing over the past years, not many studies have looked at the relationship between FE and IP in particular, especially not on a global scale. As innovation is a key driver of economic growth, it is crucial to understand the impact of women on innovation, as they do make up half of the earth’s population, after all, and can therefore meaningfully contribute to a country’s economic growth. Methodology – The research method applied in this paper was an Ordinary Least Squares Analysis (OLS) with two control variables and two moderator variables. The dependent variable was IP, measured by the Global Innovation Index (GII) and the independent variable was FE, measured by the Global Entrepreneurship Monitor (GEM). The control variables were years and countries, and the moderator variables were development stage (DS) of a country and opportunity-driven entrepreneurship (ODE) as a motivational factor. The sample size was 57 countries, observed over a period of 10 years. Results – It was found that FE has a negative effect on IP overall. Moreover, the negative effect has slightly decreased over time. One explanation of these results is the manifold barriers women are facing when trying to follow an entrepreneurship career. However, both moderator variables – ODE and the DS of a country - have a negative effect on the main relationship, which means that the negative relationship between FE and IP is strengthened even more, indicating that e.g., economies with female entrepreneurs who are highly opportunity-driven have a stronger negative effect on the IP. Moreover, the ‘developed’ stage of a country was found to be statistically insignificant. The ‘developing’ stage of a country and the opportunity-driven motive for entrepreneurship were statistically significant. Significance – The significance of this study is to give a deeper understanding into the impact females make on IP and possible factors that could influence that impact. Its novelty lies in the analysis of a relatively large sample size over time, and in that other studies usually consider economic growth or development instead of IP. The choice of indices allows a very holistic investigation, helping politicians and managers in understanding the impact of women and why this topic contains so many complexities, which makes it a challenge that is not easily mastered. Limitations – Some of this study’s biggest limitations are the choice of indicators (i.e., the GEM and GII indices) that were extremely broad and have their own limitations which makes pinpointing specific factors that influence FE hard. Additionally, not every country in the world could be included, and some data had to be transformed and imputed, which could have affected the analysis.