Women-led ventures: target margins in emerging markets

Abstract

In recent decades, though the number of female entrepreneurs has grown, a gender gap remains. Self-confidence plays a pivotal role in understanding these differences. We examine gender and target margins in a vast dataset spanning Latin America, the Caribbean, and Sub-Saharan Africa. We use linear and interval regression analysis to estimate the relationship between gender and setting target margins. We find that female-led ventures are nearly five percentage points less likely to establish target margins compared to male-led ventures, even after adjusting for observable factors. Furthermore, ventures founded by women tend to set lower target margins than those with only male founders. These disparities could be attributed to intrinsic gender characteristics, contextual influences, and unique company traits. Given the link between profit margins and self-confidence, these findings suggest that, due to their self-assurance, typically higher, male entrepreneurs often set more ambitious goals, resulting in higher profits. To promote gender equality in entrepreneurship, policymakers, accelerators, and incubators should focus on bolstering the confidence of female entrepreneurs.