Professional Service Ventures, Performance, and the Gender Effect

Abstract

It has been found in other occupations that there is a gender effect on the earning power of women: women earn less than men. Various studies have examined if there is a gender effect among professional service providers, but they have been empirically focused and generally lacking in theoretical foundation. As a result, very little progress has been made towards understanding why gender effects persist. Most of these examinations have not been based on a theoretical foundation. This study builds on feminist theory from the sociology literature. Consistent with feminist theory, we examined the effect of gender using three mediating factors: professional experience, motivation for becoming an entrepreneur, and amount of effort put into the enterprise. We find that women have less experience as business providers than their male counterparts. A lack of managerial experience is found to relate also to their lower income. Income, as a reason for becoming a professional service provider, is found to be more important to male owners. On the other hand, number of hours worked is unrelated to gender. Collectively these three mediating factors account for thirty-two percent of the gender-related income differences between male and female owners in this study, but approximately two-thirds of the income differences associated with gender still needs to be explained. The implications of these findings and future research directions are discussed.

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