Risk tolerance, gender, and entrepreneurship: The Palestinian case

Abstract

AbstractThis paper analyzes the inter‐relationships between entrepreneurial propensity, fear of failure (FoF), and gender in Palestine, using the Global Entrepreneurship Monitor (GEM) adult population survey (APS) data for 2009, 2010, and 2012, and it is the first that addresses Gender, fear of failure, and entrepreneurship for Palestine. The paper extends the analysis of the endogeneity issue of FoF by using the conditional mixed process (CMP), which improves the efficiency of the estimates. The results show that the fear of failure negatively affects entrepreneurial status, while skill perception does the opposite. It is also found that fear of failure is higher among women, although this result is not stable over time. Using the CMP specification, we find that gender and fear of failure both reduce the predicted probability of entrepreneurship consistently over time. The only variable that consistently predicts fear of failure and is significant is skill perception, which has a negative impact. Policy implications of this research point to the importance of reducing the gender gap in entrepreneurship. In particular, there is a need to improve their skill perception in order to encourage more females to be entrepreneurs. Networking, vocational education and media coverage of success stories are among the tools that could potentially achieve this result.