Entrepreneur's Gender and SMEs Performance: the Mediating Effect of Innovations

The relationship between entrepreneur's gender and business performance has been studied in existing literature assuming that it is a straight-forward direct relationship. Instead, in this study we examine how gender affects business performance through the introduction of innovations. Our aim is to explore the differences between men-led and women-led businesses as regards the performance results they obtain from innovating. We use a sample of 1376 Spanish small and medium enterprises (SMEs) to analyse the effect of entrepreneur's gender on business performance considering the mediating effect of innovations, that is, the possibility that gender indirectly influences business performance by affecting the introduction of innovations. Using econometric techniques, we estimate discrete choice models to investigate the relationship amongst gender, innovations and performance. Our main results show that men-led SMEs are more likely to achieve superior performance from innovations, and particularly, from their higher propensity to implement process innovations, in comparison to women-led SMEs. One limitation of our study is that data is cross-sectional, so that caution is needed regarding the causal interpretation of results. We contribute to uncover the role of gender on SMEs performance and the need to incorporate a policy gender perspective when dealing with enhancing SMEs innovativeness and performance.