Female Entrepreneurship, Female Employment, and Productivity

Female underperformance hypothesis, which states that female-run businesses are smaller, earn humbler profits and revenues, and make indistinct contributions to the economy may not be completely correct. In this study, we argue that while female-run businesses may be smaller and perform worse in terms of economic outcomes, their productivity levels may be higher. Also, drawing on the productivity literature, management literature, and liberal feminist theory, we explore the productivity of firms of different combinations of entrepreneurs’ gender and employee’s gender. Results reveal that females work best when they work together (i.e., when female entrepreneurs run firms with a higher rate of female employees). This study thus supports the female superior productivity hypothesis.