Female Entrepreneurship and Alternative Career Advancement Inside the Firm

Abstract

Using unique data on mutual funds and hedge funds founded between 1979 and 2005, I assess gender differences in the pursuit of new ventures. Although women transition to entrepreneurship at lower rates than men, they are more likely to pursue an alternative venturing route available inside the established organization. Moreover, gender inequality in venturing rates disappears when the rates of both internal and external ventures are considered. The results further suggest that higher rates of female intrapreneurship are unlikely to arise because of gender differences in risk-taking behaviors, differential sorting, and differential labor supply. Instead, I find evidence consistent with the notion that women become intrapreneurs at higher rates because they are more successful at intrapreneurship than men and because organizations can evaluate their skills more accurately.