Do Female Entrepreneurs Take Higher Risks in Extreme Contexts?

We investigate if environmental threats affect gender-inequality in entrepreneurial innovation. Building on role congruity theory and evolutionary psychology, we theorize that while women-led ventures are less likely to take risks and innovate due to the gendered view of risk-taking, evolutionary adaptations triggered by environmental threats increase their risk-taking and experimentation. Using the context of terrorism in Pakistan, we found that compared to ventures led by men, women-led ventures were more innovative in regions with frequent terrorist attacks than in regions with fewer attacks. Although a large workforce decreased risk-taking and innovation due to the reinforcement of social constraints, women collaborators buffered women-led ventures from these constraints. We show that environmental threats trigger evolutionary adaptations that enable women-led ventures to overcome the limitations of role incongruence.