New study challenges stereotypes
Gender stereotypes have long perpetuated the belief that women lack the confidence required to excel as entrepreneurs. However, a recent study led by Jennifer Jennings, a professor at the Alberta School of Business and Canada Research Chair in Entrepreneurship, Gender, and Family Business, debunks this stereotype, highlighting that women are equally as confident in their entrepreneurial abilities as men.
Published in Entrepreneurship Theory and Practice, the research, co-authored by Zahid Rahman and Dianna Dempsey, finds that women are just as likely as men to possess accurate entrepreneurial self-efficacy.
Surprisingly, the study reveals that men tend to exhibit overconfidence, albeit by a slight margin. This overconfidence trait is linked to a reduced inclination to seek opportunities for improvement. It also correlates with a higher likelihood of embarking on risky business ventures or overcommitting to unpromising ones.
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Examining data from the Global Entrepreneurship Monitor, Jennings and her team noted that female participation rates in entrepreneurship can be up to 20 percent lower than those of their male counterparts. However, the study questions the widespread belief that women’s perceived under-confidence is a primary factor contributing to this gap.
Jennings emphasizes the significance of challenging this perception, as training policies often assume that the confidence gap among genders is a “female deficiency” requiring correction. Women are frequently advised to bolster their entrepreneurial self-efficacy, while men are presumed to inherently possess the necessary confidence.
To investigate these assumptions further, two separate studies were conducted. In the first, male and female participants engaged in entrepreneurial-related exercises and subsequently evaluated their performance without knowledge of their scores. The findings showed that around 70 percent of women accurately assessed their confidence in evaluating opportunities, aligning with objective scores. Only six percent exhibited under-confidence, while 24 percent displayed overconfidence. Among men, roughly 64 percent accurately assessed their performance, with eight percent being under-confident and 28 percent overconfident.
Additionally, the research aimed to explore whether an “overconfident” approach, often seen as beneficial for business launch, genuinely leads to better long-term entrepreneurial outcomes. Interestingly, individuals, regardless of gender, who overestimated their performance in entrepreneurship-related tasks were less inclined to engage in behaviours beneficial for business ventures. These behaviours included critically evaluating their performance to identify areas for improvement.
In a follow-up study involving business scenarios, those who exhibited overconfidence, once again, included both men and women. They were more inclined to introduce highly innovative, high-risk products with slim chances of success. They were also significantly more likely to continue investing in failing products, escalating their commitment.
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