Why do women entrepreneurs have smaller firms? The effect of agreeableness on firm goals and size

Asia Anna Eaton · Victoria L. Pace · Kristin Nichols‐Lopez

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Entrepreneurship Studies and Influences Gender Diversity and Inequality Migration, Ethnicity, and Economy

Abstract

In the U.S., women-owned businesses are typically smaller than businesses owned by men. In the present paper we examine the extent to which gender differences in entrepreneurs’ agreeableness, a personality dimension including attributes such as compassion and helpfulness, impact their business goals and ultimately their business outcomes using a sample of 423 U.S. entrepreneurs. As expected, women entrepreneur’s higher levels of agreeableness led them to prioritize social goals in their firms more than men, while men’s lower levels of agreeableness explained their relatively higher prioritization of business growth goals. Driven by gender differences in agreeableness, men’s greater commitment business growth goals and women’s greater commitment to social goals significantly explained women’s lower business revenues and fewer efforts at business growth.

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