Women Hold Up Half the Sky? Informal Institutions, Entrepreneurial Decisions, and Gender Gap in Venture Performance

Abstract

Studies that apply gender role congruity theory (GRCT) have focused on resource providers’ biased evaluations and women entrepreneurs’ internalization of gender stereotypes as primary mechanisms explaining the gender gap in venture performance. We provide an institutional foundation for GRCT and argue that informal political–cultural institutions—namely, government interference in market-based competition and cultural beliefs regarding gender inequality—differentially shape male versus female entrepreneurs’ venture performance through their influences on entrepreneurs’ industry selection and participation in after-work social activities. Our study of 7,626 Chinese entrepreneurial firms provides strong support for our arguments and contributes to women’s entrepreneurship theory and practice.