Entrepreneurs: Gender and gendered institutions' effects in open innovation

Abstract

The open innovation framework is particularly important for entrepreneurs, but related studies have not adequately explored the impact of institutions and important social constructs – such as gender or family embeddedness - on firm performance. Yet, these constructs may influence outcomes. To contribute to unraveling this unknown, we analyzed survey responses from 198 man and 188 women entrepreneurs in technology parks across China and found that gender played a significant role in how open innovation practices relate to firm performance, with women-led firms engaged in open innovation outperforming those led by men. This relationship strengthened as perceived institutional quality improved, yet it dissipated when women entrepreneurs were embedded in firms with family involvement. We posit that this is caused by differences in perceptions of institutional quality and gendered institutions, as family is in China, among genders. Our study, therefore, uses gender and gendered institutions to enrich the open innovation, family business, and entrepreneurship literature. We show that these factors influence entrepreneurs' perceptions of institutional quality and therefore play an important role in the performance outcomes of firms engaging in open innovation activities in a given institutional environment. Managerial summaryOur study shows that institutional support gained by being embedded within technology parks is important for entrepreneurs to engage in open innovation practices and the resulting performance benefits that accrue, which indicates that policymakers should focus on improving such support. In addition, our study shows that institutional quality is perceived differently by genders. The result is that women-led firms involved in open innovation perform significantly better than those led by men. This finding provides an important incentive for investors to engage with women entrepreneurs in technology parks. However, investors should also note that the performance benefits for women-led firms disappear when women entrepreneurs are embedded in firms with family involvement. Finally, managers of other firms in a technology park may benefit from the positive spillover effects of women-led firms engaging in open innovation activities.