Women Entrepreneurs and Family Firm Heterogeneity: Evidence from an Emerging Economy

Abstract

Family firms add to the economic and social well-being of countries. While research on heterogeneity of family firms is gaining momentum, it has mostly been gender-neutral. The study fills this gap by examining heterogeneity of family firms owned and managed by women, in the context of a developing country-Brazil. The study draws upon the resource-based view of the firm to investigate the relationships between firm performance, family involvement, and financial resources at the start-up phase. An inductive analysis reveals two patterns. First, family firms that are started with the family achieve better performance than firms that are launched without the family and later evolve into a family business. Second, family firms that are funded with women entrepreneur's own savings achieve worse performance than family firms that are started with borrowed funds. The results are useful for strategic decision making in fostering family businesses headed by women and proactive public policies for future innovation to enhance the success of women entrepreneurs.Article:

Inspired or Foolhardy: Sensemaking, Confidence and Entrepreneurs’ Decision-Making

“…This certainly suggests that, as entrepreneurs develop and gain experience from environmental volatility, and even the demise of peers, they hold a more realistic view of the market and make decisions more aligned to market demands. Such a finding would support Toft-Kehler et al (2014) by demonstrating the application of learning as the entrepreneur becomes more practiced in their environment, rendering them able to translate their experience into more cautious expertise (Castrogiovanni et al 2016;Welsh et al 2017). In contrast, new entrepreneurs seem more determined to consider themselves performing well in their current situation, apparently impervious to evidence to the contrary, in the form of sales.…”

“…They are adaptable and act in flexible ways (Zimmermann 1995), based on instinct rather than planned calculation. Welsh et al (2017) argue that experience plays a role in performance here, tempering early stage optimism, and introducing more realistic expectations to the decision-making process. For example, Morris and Zahra (2000) found that new entrepreneurs' unfamiliarity with their own, and their firms', roles led to early mistakes in expectations.…”

Women’s entrepreneurship: A model of business-family interface and performance

“…In Poland, using the women entrepreneur's own savings at the venture's start-up phase rather than money borrowed from family or others, was found to be positively related to firm performance (Welsh et al, ongoing research). In Brazil, however, this relationship was negative (Welsh et al 2017d). At the same time, organizational support was found to be positively related to firm performance in Brazil.…”

Women successor selection

“…In practice, this work highlights the main factors to facilitate participation of women like successors in family businesses. The main results show that the variables that are significant and influence the choice of a woman as a successor are the gender of the current CEO, therefore, if the managerial position are in woman hands, has a positive effect on the choice of female successor (Welsh et al, 2018). The female ownership variable is also significant; therefore, greater men ownership has a negative impact on the woman successor election.…”