Kalnins & Williams (2021) Is An Instance of Outdated Literature Review: Authors Should Provide Complete Picture

Received: 10 November 2019 Revised: 10 January 2021 Accepted: 12 January 2021
DOI: 10.1002/smj.3266
RESEARCH ARTICLE
The geography of female small business

survivorship: Examining the roles of
proportional representation and stakeholders
The Literature Review of this article is
Arturs Kalnins | Michele Williams out-dated. Authors didn't provide complete
picture because literature from 2015-2019
are missing in hypotheses development.
The University of Iowa, Iowa City, Iowa
Abstract
Correspondence Research summary: Combining insights from
Arturs Kalnins, The University of Iowa, research on firm-level stakeholders with the well-
John Pappajohn Business Building, Iowa
established micro literature on social categorization,
City, IA 52242-1994.
Email: arturs-kalnins@uiowa.edu we develop and test a theory regarding the relative sur-
vivorship of female-owned and male-owned businesses.
The theory is based on proportional representation
within geographic areas, defined as each area's female-
owned proprietorship count divided by its total proprie-
torship count. Analyzing survivorship of over one
million proprietorships, we find a robust positive rela-
tionship between proportional representation and sur-
vival. We then examine effects of local stakeholders
such as banks, customers, and network opportunities,
in combination with proportional representation. Our
research suggests that the effects of female proportional
representation are more pervasive than previously con-
sidered, influenced by communities of business stake-
holders, and, in some cases, leveling the playing field
for female entrepreneurs.
Managerial summary: We analyzed relative survival
duration of one million female- and male-owned pro-
prietorship businesses. We argued that a higher propor-
tional representation of female business owners among
all owners in a geographical area would combat nega-
tive stereotypes about women's business competence.
We found that female-owned businesses survived rela-
tively longer than their male-owned counterparts in
Strat Mgmt J. 2021;1–28. wileyonlinelibrary.com/journal/smj © 2021 Strategic Management Society 1

2 KALNINS AND WILLIAMS
areas with substantial proportional representation of

female owners and that the relative benefits for women
were magnified in the presence of local banks (which
provide capital) as well as in customer-rich and
network-rich areas. Business ownership has been pro-
posed to be a “great equalizer” for women frustrated by
the glass ceilings of corporate employment. We find
this is true, but only in areas with a high proportional
representation of women among business owners.
KEYWORDS
geography, small business, stakeholders, survivorship, woman-
owned business
1 | INTRODUCTION
The proportion of businesses in the United States owned by women grew substantially in the
decades before the new millennium (Blau, 1998), but a postmillennium steady state has been
reached in which the proportional representation of women owners is substantial but remains
short of parity with men. The Census 2012 Survey of Business Owners reported that women
owned 9.9 million U.S. firms that year, or 35.7% of all firms. Another 2.5 million firms, or
8.9%, were equally owned by women and men. Documenting and explaining the lack of
proportional representation parity has been a fundamental research question in the academic
field of women's entrepreneurship and has generated a large, growing literature.
(See, e.g., Jennings & Brush, 2013, for a review). The interest in the topic is not merely aca-
demic: a 2018 Boston Consulting Group study using data from 73 countries deduced that
increasing (i) proportional representation of women among business owners and (ii) survival
duration of their businesses, to a state of parity with men could add between $2.5 and
$5 trillion to the world's economy, with $400–$800 billion of that in North America
(Unnikrishnan & Hanna, 2019).
The phenomena of proportional representation and survival duration thus appear to be
closely linked from the perspective of global economic welfare. Yet, while academics have
extensively studied the relative survival duration of male and female owners (see, Jennings &
Brush, 2013), a relationship between proportional representation and relative survival duration
has remained untheorized and empirically uninvestigated.
In this article, we hypothesize a direct relationship between women's proportional represen-
tation among business owners within a geographical area and their firms' survival duration rel-
ative to that of male owners. We take care to ensure our survivorship theory accurately depicts
the small business firm-level of analysis. Critical to our theoretical development is the consider-
ation of how external stakeholders and the resources they provide to small firms are influenced
by the implications of proportional representation and social category-based, gender beliefs (ste-
reotypes) for the perceived competence of female business owners. Therefore, we also explicitly
articulate and test moderating hypotheses regarding specific stakeholder effects related to the
presence of banks, customers, and network opportunities.
KALNINS AND WILLIAMS 3
We develop our theory about proportional representation and stakeholders within the con-
text of defined geographic units because geographic proximity is central in facilitating human
interaction among stakeholders, which in turn leads to shared norms (e.g., Festinger,
Schachter, & Back, 1950) that often overlap with the norms of the populace surrounding those
firms (Marquis, 2003). Moreover, social category beliefs and their impact on social norms typi-
cally vary across geographic contexts (Ely & Padavic, 2007).
We analyze survival duration data for over one million retail and service proprietorships,
the complete population of this organizational form over a 13-year period in the State of Texas.
We also conduct robustness tests using data on incorporated businesses. To perform these ana-
lyses, we utilize one of the few publicly available, easily accessible population-level sources of
business survival data in the world. Beyond its value for this study, our description of the con-
tent, processing and analysis of these data will hopefully encourage and aid future research to
apply these data, and to develop and test new theories about small business and geography.
Empirically, we recognize that unobservable variables may exist that attract prospective
owners to some areas, and that such variables might also influence survival duration. Thus, spe-
cific empirical methods must be applied to establish causality between antecedents and
performance-related variables such as survival duration (Semadeni, Withers, & Trevis
Certo, 2014; Shaver, 1998). To eliminate noncausal and reverse-causal interpretations for our
baseline result, we employ an exogenous instrumental variable for proportional representation.
Using these methods, we find a robust positive relationship between proportional representa-
tion of women owners within a geographic area and their survival duration, relative to that of
male-owned firms. We also find support for moderating hypotheses: the presence of local stake-
holders such as banks, customers, as well as network opportunities, in combination with pro-
portional representation, further enhances the relative survival duration of women-owned
firms.
We make several contributions to the strategy, management, and entrepreneurship litera-
tures. First, by integrating stakeholder theory and social categorization theory to examine pro-
portional representation of business owners, we reveal the pervasiveness of the effect of
proportional representation beyond that which has been investigated within firms. Second, we
provide a path forward for research focused on explaining the underperformance of female-
owned businesses; our path focuses on investigating and predicting a continuum of outcomes
for female owners rather than over/underperformance as a universal, binary outcome. In our
case, we look across geographic areas and find that performance ranges from survival duration
equality for men and women to substantial underperformance for women. Finally, we propose
and find that the proximate presence of stakeholders can magnify the beneficial effect of pro-
portional representation on the relative survival duration of woman-owned firms, thus intro-
ducing a new mechanism through which stakeholders may influence the success of firms.
2 | T H E GE O G R A P H Y O F F E M A L E S M A L L BU S I N E S S
SURVIVOR SHIP: THEOR Y
2.1 | Gender and geography
Although research on gender suggests that stereotypes continue to affect women in the business
world (Ding, Murray, & Stuart, 2013; Gupta, Mortal, & Guo, 2018; Williams & Polman, 2015),
the strength of that impact varies with the context of those businesses because perceptions, in
general, are context dependent (Kahneman, 2003). Moreover, social constructionists argue that
negative gender stereotypes and male dominance are not immutable aspects of all contexts
(Ely & Padavic, 2007) but can vary across organizations and regions (Hoobler, Masterson,
Nkomo, & Michel, 2018; Kalnins & Williams, 2014; Post & Byron, 2015). Social constructionism
posits that knowledge is not the direct result of sensory data, but rather is shaped by the lan-
guage and beliefs of communities (Berger & Luckmann, 1966). We argue that the social con-
struction of gender stereotypes and expectations for men and women may differ with respect to
resource acquisition across geographic regions (Ahl, 2006; Alvesson & Billing, 2009; Loscocco &
Bird, 2012). Before developing hypotheses, we review the established knowledge base regarding
social categorization processes that undergirds our theory.
2.2 | Gender stereotypes and expectations: A review of social

categorization
Social categorization processes involve identifying individuals as members of a specific social

category based on demography, profession, or other affiliation (Hogg & Terry, 2000;
Tajfel, 1981; Turner, 1987) and applying beliefs associated with those categories (i.e., the stereo-
types) to individual group members (Fiske & Taylor, 1991; Heilman, 2012). Social categoriza-
tion processes can occur intentionally or outside of individuals' awareness and will affect
decisions and behavior unless explicit efforts or external motivations to use more cognitively
taxing processes are in place. Given that categorization processes require little cognitive effort,
they are one of the heuristics associated with bounded rationality (Kahneman, 2003). The effect
of categorization processes on initial perceptions of others' competence and trustworthiness are
well-established in the psychology and organizational literatures (Adler, 2001; Crisp &
Jarvenpaa, 2013; Kramer & Lewicki, 2010), and these initial perceptions can set the course for
future cooperation such as that between owner and stakeholder (Ferrin, Bligh, & Kohles, 2008).
In business contexts, social category-based beliefs, that is, stereotypic beliefs and the norms
that result from these beliefs, can be problematic because people automatically categorize
others based on visible demographic attributes such as gender (Fiske & Taylor, 1991;
Greenwald, Poehlman, Uhlmann, & Banaji, 2009). And people often stereotype others by apply-
ing conscious and unconscious beliefs about gender categories to individual category members,
that is, individual men and women (Fiske & Taylor, 1991; Heilman, 2012).
Moreover, for gender, the beliefs and expectations associated with men versus women not
only differ from one another, but also “remain extremely powerful because (a) they are evoked
by highly visible, biological characteristics and (b) they are based on selective information and
myth acquired throughout people's lives” (Rudman & Phelan, 2008, p. 63).
For female business owners, gender stereotypes, which include a lack of business-related
competence (Ahl, 2006; Fiske, Cuddy, Glick, & Xu, 2002; Heilman, 2012; Kray, Kennedy, &
Van Zant, 2014), may undermine a community's ability to evaluate women's competence
because gender is associated with anticipated performance levels across tasks that are consid-
ered “male” and “female” irrespective of the actual correlation between gender and relevant
outcomes (Ely & Padavic, 2007; Ridgeway & Erickson, 2000). The lack of fit between category-
based expectations for women and those for successful leadership and business ownership
(Ahl, 2006; Beaman, Chattopadhyay, Duflo, Pande, & Topalova, 2009; Ding et al., 2013; Dixon-
Fowler, Ellstrand, & Johnson, 2013) as well as the norms that result from these beliefs often dis-
advantage women's careers and their firms (Dixon-Fowler et al., 2013; Lee & James, 2007).
However, the content or beliefs associated with gender stereotypes may vary in the degree to
which they include negative beliefs about women's business competence. In the next section,
we build hypotheses related to geographic sources of this variation and their impact on the per-
formance of male- and female-owned businesses.
2.3 | Perceived competence, stakeholders, and resources
2.3.1 | The role of proportional representation
Scholars have studied women's proportional representation with respect to individuals within
firms such as employees, top management team members, or board members (Abdullah,
Ismail, & Nachum, 2016; Chen, Crossland, & Huang, 2016; Dezsö & Ross, 2012; Ely, 1995;
Lyngsie & Foss, 2017), occupations and industries (England, 1992; Hanson & Pratt, 1991;
Reskin, 1993; Reskin & Ross, 1992), and political bodies (Beaman et al., 2009; Beaman, Duflo,
Pande, & Topalova, 2012). High proportional representation of women among upper manage-
ment of firms has typically been found to benefit women at all levels of the firm both in terms
of performance and in terms of more positive stereotypical beliefs and norms shared within
these contexts. Ely (1995), for instance, found that greater proportions of women in senior posi-
tions within firms were associated with fewer perceived psychological and behavioral differ-
ences between men and women in those firms—in particular, fewer differences that would be
classified as stereotypical gender-role traits and behaviors. In addition, women in male-
dominated firms evaluated the fit between women's stereotypic attributes and success less
favorably than did women in firms with a larger proportion of senior women.
Proportional representation is likely to affect businesses within the same geographic area in
a similar fashion because stereotypic beliefs and norms are frequently shared within the area
(Festinger et al., 1950; Marquis, 2003; Sampson, Morenoff, & Gannon-Rowley, 2002), including
beliefs and norms regarding the acceptance and competence of women as business owners
(Beaman et al., 2012; Hanson & Blake, 2009; Merrett & Gruidl, 2000). However, in contrast to
women's proportional representation within firms, which primarily affects the positive stereo-
typical perceptions that organization members have of women's competence, we posit that
women's proportional representation among business owners in a geographic area influences
the beliefs of external stakeholders who are critical for small business outcomes.
2.3.2 | Stakeholders
External stakeholders are defined by Freeman and Reed (1983, p. 91) as any group or individual
“on which the organization is dependent for its continued survival.” Small firms often receive,
or do not receive, resources from stakeholders based on their perceived competence
(Adler, 2001; Weiler & Bernasek, 2001), which includes stakeholders' beliefs regarding the
appropriateness of start-up owners' credentials (Florin, Lubatkin, & Schulze, 2003). Perceived
competence is a central aspect of coordination and economic exchange between small firms
(e.g., Adler, 2001; Zucker, 1986). As emphasized by Aldrich and Fiol (1994, p. 650), small entre-
preneurial firms must “interact with extremely skeptical customers, creditors, suppliers and
other resource holders, who are afraid of being taken for fools.” In particular, small firms often
are dependent on local stakeholders for resources such as (i) financing approved by local bank
branches, which are often given autonomy to adapt lending routines to local norms (Agarwal &
Hauswald, 2010; Degryse & Ongena, 2005; Petersen & Rajan, 2002) and (ii) patronage provided
by local individuals and business customers (Reilly, 1931; Weiler & Bernasek, 2001).
We predict that in geographic areas with high proportional representation, it may be more
typical to encounter stakeholders including bank officers, customers, and others who hold gen-
der stereotypes that include positive descriptors related to women's business competence and
the perception that business ownership is an appropriate career path for women. These beliefs
in the competence of female business owners within a geographic area may be associated with
community norms of resource allocation that increase the material and knowledge resources
that the local community and its stakeholders makes available to female-owned businesses.
Hypothesis (H1). Geographic areas that exhibit a higher local proportional representation of
women among business owners will also exhibit a higher survival duration of female-owned
businesses, relative to that of male-owned businesses.
2.3.3 | Banks
Regarding banks, Agarwal and Hauswald (2010) found that the closer a firm is to a bank's
branch office, the more likely the bank is to offer credit. And Petersen and Rajan (1995) found
that more localized competition in an area (i.e., more banks) increases the likelihood of an offer
of credit. However, bank loans for small businesses involve subjective judgment (Berger &
Udell, 2002), and women tend to be disadvantaged by subjective performance criteria when
norms and beliefs characterize men as more competent (Ding et al., 2013). Therefore, the prox-
imity of banks and businesses will allow local social norms to determine in part the lending
decisions and how much women owners may benefit from the presence of banks. Based on our
arguments so far, an increase in local proportional representation of female business owners
should improve relative survival duration for female owners by influencing local social norms
and gender biases. Specifically, lenders should be more likely to view female owners as compe-
tent and should be willing to provide more financial resources. This improvement in relative
survival duration should be amplified by the number of banks. Building on Petersen and
Rajan's (1995) result that more banks imply an increased likelihood of offers of credit, we argue
that an increase in local proportional representation of women among business owners should
improve relative survival duration more when there are many banks, because more women will
benefit from the willingness of banks to provide financial resources.
Hypothesis (H2). The survival duration ratio of female- to male-owned businesses will be higher
within geographic areas that exhibit a higher multiplicative product of local bank presence
and local proportional representation of female-owned businesses.
2.3.4 | Customers
The ability to attract customers is a key success factor for any business (Reilly, 1931). While
the locations of small businesses are usually constrained by the location of their owners'
residences (Dahl & Sorenson, 2012; Kalnins & Lafontaine, 2013), they nonetheless will try
to find locations within their area that are most likely to attract customers (Reilly, 1931).
Yet even within customer-rich areas, women-owned businesses may experience customer
bias resulting in reduced patronage from community members, based on owner gender. If
potential customers know an owner's gender they may, consciously or unconsciously, apply
beliefs about competence associated with gender categories that disadvantage women
(Ely & Padavic, 2007).
Weiler and Bernasek (2001) present extensive empirical evidence that owner-gender-based
customer bias exists and that this bias is exacerbated by segmentation of employees by gender:
when a customer interacts with an employee from a women-owned business, the employee is
approximately twice as likely to be female. Building on this evidence, these authors develop a
mathematical model that shows, even with substantial uncertainty regarding owner gender, a
noisy signal such as employee gender, combined with customers who may act on owner-gender
biases, generates an equilibrium with substantial performance gaps for women owners and
their firms. This outcome occurs not only when customers intend to discriminate based on gen-
der, but also when customers do not intend to discriminate against female salespeople or female
business owners. Customers may be merely reacting based on conscious or unconscious beliefs
that gender categories are closely and differentially associated with competence. For instance,
behavioral studies have found that, on average, female sales people are viewed as possessing
less expertise than their male equivalents (Comer & Jolson, 1991; Jones, Moore, Stanaland, &
Wyatt, 1998), and that perceived expertise of a salesperson is a stronger predictor of purchase
intentions than other factors such as likeability or trustworthiness (Jones et al., 1998), charac-
teristics where women may hold an advantage based on stereotypic assumptions about their
attributes or their actual behavior.
Therefore, analogs to the case for banks as discussed above, when the proportional represen-
tation in an area increases, women owners and their female employees are more likely to be
perceived as more competent in their interactions with customers and in possession of expertise
regarding the products and services they sell. Customers should be more willing to provide
patronage in such areas. This improvement in relative survival duration should be magnified in
customer-rich areas: the increase in local proportional representation of female business owners
should improve relative survival duration for female owners more when there are many cus-
tomers, because more women will benefit from the increased sales at their businesses that will
lead to an increase in survival duration.
within geographic areas that exhibit a higher multiplicative product of local customer pres-
ence and local proportional representation of female-owned businesses.
2.3.5 | Networking opportunities
Social networks within a geographic area are another source of resources for small business
owners, particularly in the dimension of knowledge and information resources. Social networks
often form among business owners during interactions in formal and informal meetings
(Ingram & Roberts, 2000; Zuckerman & Sgourev, 2006) and through repeated interactions with
common suppliers (Kalnins, Swaminathan, & Mitchell, 2006). Networks provide access to
important resources relevant for organizational performance and survival (Kalnins &
Chung, 2006; Unnikrishnan & Hanna, 2019; Zuckerman & Sgourev, 2006). Women's access to
mixed-gender networks may be limited if they are not seen as holding the stereotypic male
traits of being “highly committed to business pursuits” or as having the agentic “desire to
improve business performance.” These perceptions were reported by business owners as critical
for accepting and retaining members in their mixed-gender small business network groups
(Zuckerman & Sgourev, 2006, p. 1342).
While networks in general are often based in an actor's home community (Festinger
et al., 1950; Zipf, 1949), research has consistently found that women are more likely than men
to network with contacts in the community of their home residence (Hanson & Pratt, 1991;
Moore, 1990). A high density of business-owners among residents in a community increases
these networking opportunities (Andersson, Larsson, & Öner, 2017; Ibarra, 1992). Further, in
the context of small businesses, Jack (2005) presents qualitative evidence showing that strong
ties (i.e., Granovetter, 1973) are particularly important for performance outcomes and that
strong tie development is facilitated by the repeated interactions that result from geographical
proximity.
Although social categorization processes have been shown to increase homophily of net-
works (in our case more same-gender members), a higher proportional representation of female
small business owners should foster perceptions that women are competent and valuable net-
work members, and thus enhance the willingness for male business owners to interact with
their female counterparts. Thereby, proportional representation should increase the likelihood
that women will be included in mixed-gender networks. At the same time, a higher propor-
tional representation of female small business owners should also increase opportunities for
women to develop network relationships with other female business owners. Recent research
has shown that female business owners—like their male counterparts—benefit from having
broad networks, but the women who are most successful also have strong ties within a close,
dense network of female colleagues (Carboni, Cross, Page, & Parker, 2019; Hanson &
Blake, 2009). Therefore, a high density of business owners among the population in an area
with high proportional representation should facilitate women's access to broad networks that
include both male and female business owners.
within geographic areas that exhibit a higher multiplicative product of local networking
opportunities and local proportional representation of female-owned businesses.
3 | RESEARCH DESIGN AND ANALYSIS STRATEGY
3.1 | Texas sales and use tax permit holder data
The Texas sales and use tax data set is one of very few sources of population-level data of sales-
tax collecting businesses and their ownership (see also Guzman & Kacperczyk, 2019, for similar
data from California). The data set contains information about every business establishment
that collected sales taxes in the U.S. State of Texas—hence, every establishment that sold at
least some goods or services to end consumers. After sorting and grouping records, we had data
on 2,202,935 establishments operating at some time between 1990 and 2006, including
1,447,952 proprietorships, which survived an average of 884 days (see Kalnins &
Lafontaine, 2013; Kalnins & Williams, 2014, for additional detail). We restricted our analysis to
proprietorships because we know the owner's full name, which we use to identify gender. Pro-
prietorships are also ideal for this study because their owners are often hands-on managers and
the most visible faces of the business. Thus, owner gender is particularly likely to matter for this
group. We also know the firm name and address of each proprietorship, the date the proprietor-
ship began operations under its owner, which we refer to as the founding date, and if/when the
proprietorship went out of business or ownership was transferred. Finally, we know each pro-
prietorship's industry, based on the 1987 four-digit SIC codes, which are available only through
2003. Therefore, we do not analyze proprietorships founded after that date.
3.2 | The social security baby name data
To determine owner gender of the 1,447,946 proprietorships, we followed the gender-

identification approach of Gallagher and Chen (2008, 2009) and relied on (i) the U.S. Social
Security Administration (SSA) database of the top 1,000 baby names for boys and girls for every
decade since the 1880s and (ii) the Texas marriage and divorce records database that contains
all “husband” and “wife” first names from the last 50 years. In each database, we summed the
males and females given each name and used this total as a basis for assigning gender to our
business owners. If a first name appears for only one gender in the databases, then any business
owner with that name is assigned that gender. However, some names appear for both genders
in the database. For these, we used the following cutoff: if 20 times more individuals of one gen-
der have a certain name than do individuals of the other gender, we assigned the business
owner the more common gender. The most common first names excluded because neither gen-
der dominated by 20:1 were “Terry,” “Lee,” and “Dana.” Using this approach, we were able to
assign gender for 1,365,084 (94.3%) of the proprietorships, 597,080 (43.7%) of which were owned
by women and 768,004 (56.3%) were owned by men.
Of the 1,365,084 gender-identified proprietorships, 1,175,370 were founded between 1990
and 2003; for these there is no survivor bias, because we have information for all businesses
founded during this period regardless of how long they survived. We only have information on
pre-1990 founded businesses if they survived at least until 1990. We use only the 1990–2003
foundings as observations in our first step analysis but all establishments in business from 1990
through 2003 to construct the proportional representation independent variables.
3.3 | The zip code as the geographic unit of analysis
Extensive sociological and economic geography research, as reviewed by Sampson et al. (2002),
has shown that norms and beliefs often vary substantially within a city by neighborhood. The
zip code is one of the two most common operationalizations of neighborhood among the studies
reviewed. Further, in our setting, customers often choose small retail or service establishments
that are within 3 min' drive from their homes and almost always those within 7 min
(Salvaneschi, 1996). And, the small business lending studies cited above (Agarwal &
Hauswald, 2010; Degryse & Ongena, 2005; Petersen & Rajan, 2002) find average distances
between small businesses and their banks of only 1.2, 2, and 4 miles, respectively. These statis-
tics suggest that proprietorships and stakeholders will often co-exist within the same zip code.
We recognize that proximate geographic areas might influence residents' norms and beliefs
regarding the appropriateness of women as business owners. For this reason, we include robust-
ness tests with spatial lag terms (Anselin, 1988) to capture any effects arising from neighboring
zip codes in our second-step regressions.
3.4 | Survival duration
Our dependent variable of survival duration is important in two dimensions. First, as per the
BCG study cited earlier (Unnikrishnan & Hanna, 2019), parity of men's and women's busi-
ness survival duration may be a key driver of worldwide economic growth that is possibly in
the trillions of dollars. Second, from the perspective of an individual business owner, survival
duration is an important component of performance. For example, Headd (2003) found that
67% of closed businesses exited because their owners characterized them as unsuccessful.
We conclude that survival duration is meaningfully related to economic performance and
welfare.
3.5 | Two-step analysis strategy
To investigate the relationship between proportional representation and survival duration, we

conduct an analysis in two steps. In the first step, we estimate the relative survival duration of
female- and male-owned businesses, yielding coefficients (logs of hazard ratios) for each zip
code. These coefficients then become the dependent variables for a second step where the unit
of analysis is the zip code, weighted by the square root of proprietorship entrant count in each
zip code. Our approach acts as a two-step version of an interaction term between a demographic
attribute and demographic composition of a unit, in this case, a geographical area.
Milton Friedman's (1957) analysis of the consumption function is a well-known example of
a study that aggregates data by geographical area. In his first step, Friedman estimated average
income by city based on observations from individuals. His second step was a weighted regres-
sion using city-level data. Our approach is also similar to two-step models of race and educa-
tion, such as that by Braun, Jones, Rubin, and Thayer (1983), where academic performance of
black and white business students was estimated at the school level in the first step and then
the relative performance was analyzed by school in the second step. A two-step approach
(i) reduces measurement error among independent variables, (ii) eliminates the need for often
unstable three-way interaction terms, and (iii) yields a conservative sample size (zip code-years
rather than individual firms) for calculating standard errors. Further, (iv), conducting a 2-Stage
Least Squares, Instrumental Variable (2SLS IV) analysis (Dahl & Sorenson, 2012; Kalnins &
Lafontaine, 2013) and (v) using a spatially lagged dependent variable (e.g., Anselin, 1988) are
possible in the second step of analyses like these, but not directly in a survival duration analysis.
Both stages of 2SLS constitute the “second step.”
3.6 | First step regression: survival duration analysis of individual

proprietorships
In this first step, we generate the coefficients for relative survival duration at the zip code-year
level by estimating Weibull proportional hazard regressions where the unit of analysis is the
proprietorship. In a Weibull proportional hazard regression, the hazard rate, or the rate of
instantaneous transition from origin state (active establishment) to destination state (owner's
exit from that establishment), for observation i is:
hi ðt Þ =p tp − 1 expðX i βÞ, ð1Þ

where i are the 1,175,370 proprietorships in the regression, and t is any point in time before the
end of October 2006 in which i is an active establishment. The variable p is a shape parameter
to be estimated that controls for firm age. Xi is a vector of independent variable values for i and
β is a vector of coefficients. The independent variables we include in X are (i) baseline intercepts
for all zip code-years and all SIC code-years, as controls and (ii) the zip code-years and SIC
code-years interacted with an owner's gender.
βWZIPYR is the coefficient vector associated with the zip code-year/gender interactions; it is
the measure of relative survival duration that we use as the dependent variable in the second-
step regression, where the units of analysis are the zip code-years. Positive values of βWZIPYR
suggest a gender gap; negative values suggest a female advantage. The exponentiated form, Exp
(βWZIPYR), provides an intuitive basis for estimating magnitude of effect. It is the “hazard ratio,”
defined as the ratio of the estimated instantaneous hazard rate of female-owned to that of male-
owned businesses. Because of this straightforward interpretation, we believe that logs of hazard
ratios represent ideal dependent variables in our second-step analyses of zip code-year-level pro-
portional representation.
3.7 | The second-Step regression and the use of an instrumental

variable
For the second step, the unit of analysis is the zip code-year. We estimate:
βWZIPYR = ðproportional representation on Jan:1 of yearÞβPR +Xβ +ε, ð2Þ
where βWZIPYR, estimated in Step 1, is the dependent variable. The independent variable of
interest is women's proportional representation among proprietorship owners in each zip code
on January 1 of each yearly observation. βPR is the coefficient to be estimated for proportional
representation. X represents a matrix of hypothesized and control variable values and β the
related coefficient vector to be estimated.
In an OLS or WLS regression, such as those we use to test Hypotheses (H2)–(H4), Equation (2)
is the only equation estimated and the “proportional representation” variable is assumed
uncorrelated with ε. In the 2SLS IV regressions used to test Hypothesis (H1), Equation (2) becomes
the structural equation where proportional representation is treated as endogenous. For 2SLS IV,
we also estimate a first-stage linear projection of proportional representation on the instrument:
Proportional representation, Jan:1 = ðp:r:instrumentÞβI +Xβ +ζ, ð3Þ
where the proportional representation instrument is described below.

Specific empirical methods must be applied to establish causality between antecedents and
survival duration (Semadeni et al., 2014; Shaver, 1998). Unobservable variables may exist that
induce prospective owners to open businesses within a geographic area, and these variables might
also influence survival duration. For an instrumental variable to eliminate the biases caused by
such unobservable variables, two criteria must be fulfilled. First, the instrument must have a logi-
cal causal relationship with the endogenous variable, in this case, the proportional representation
of women owners. Second, the instrumental variable should not be correlated with the error term
ε in Equation (2). In other words, there should be no direct relationship or unobservable common
causes of the instrument and the outcome. This criterion is an untestable assumption.
The researcher must argue convincingly that an instrument has a logical relationship with the
endogenous variable and is correlated with the dependent variable only through this endogenous
variable (Bettis, Gambardella, Helfat, & Mitchell, 2014; Semadeni et al., 2014).
3.8 | The instrument used to test (H1): Premature deaths, quotient of

proportions
This instrument exploits the fact that, by chance, some geographic areas will have more prema-
ture deaths of adult women relative to those of adult men. Using the Social Security Death
Index, we counted by zip code of last permanent residence the number of adults who were
between 18 and 44 years of age when they died, and these deaths took place in the 10 years
before the year of each zip code-year observation.
Gender was identified using the Social Security Baby Name 20:1 ratio described above. We
calculate two proportions by dividing (i) PDw, the number of female premature deaths by POPw,
the total number of women aged 18–44 living in the zip code and (ii) PDa, the number of all
premature deaths by POPa, the zip code's total number of residents aged 18–44. Proportion 1 is
then divided by Proportion 2 in order to remove the zip code's base rate of premature death
from the instrument. The instrument can be written as:
Premature Deaths, Quotient of Proportions = ðPDw =POPw Þ=ðPDa =POPa Þ ð4Þ
A greater quotient of proportions calculated in the 10 years previous should lead to a smaller
pool of potential woman business owners and thus lower proportional representation in the year
of the observation. Yet, the instrument should be uncorrelated with ε in Equation (2) because of
the random nature of most premature deaths (accidents explained 31.6% of premature deaths;
cancer and heart disease 21%; http://www.dshs.state.tx.us/CHS/VSTAT/latest/nmortal.shtm).
We address a possible concern regarding the validity of this instrument: it is well accepted
that socioeconomic status is linked to better health (Wilkinson & Pickett, 2009). This fact does
not invalidate our instrument—our argument about norms and beliefs regarding the appropri-
ateness of women as business owners is, broadly speaking, a socioeconomic status argument—
but it does suggest a hypothesis that might cause concern. Women might plausibly enjoy a
lower premature death rate, relative to that for men, if they live in high-status areas. Status, in
turn, might be correlated with proportional representation among women proprietorship
owners and with their relative survival duration. Our instrument might then be correlated with
ε. However, three public health studies using U.S. (Kawachi, Kennedy, Gupta, & Prothrow-
Stith, 1999), Swedish (Backhans, Lundberg, & Mansdotter, 2007), and Mexican (Idrovo &
Casique, 2006) regional data all find results that contradict the above hypothesis: women's sta-
tus within a geographic area is, in fact, correlated with a convergence of longevity of the gen-
ders, not with a greater increase in longevity for women relative to men.
3.9 | The primary variables interacted with proportional

representation that test (H2)–(H4)
To test H2, we counted the number of bank branches in a zip code in each year using the
FDIC's annual “Bank Branches and Locations” files. As mentioned earlier, several studies have
found that small businesses usually do business with banks located within a few miles, thus
often in the same zip code (Agarwal & Hauswald, 2010; Degryse & Ongena, 2005; Petersen &
Rajan, 2002).
Hypothesis (H3) is tested using the count of McDonald's in a zip code as a proxy for cus-
tomer presence. We chose this proxy based on academic references to the accuracy of
McDonald's in finding customer-rich locations for their stores, which has been a large part of
their success (Salvaneschi, 1996). Chau and Pretorius (2001, p. 9) stated “McDonalds' location
strategy is possibly the most closely watched retail location leading indicator wherever it is
active in a market.” Further, Hsieh, Li, and Lin (2015) found that the presence of a McDonald's,
Dunkin' Donuts, or Starbucks was the best predictor of high customer traffic in an area when
compared to several “state of the art” measures used by retail location practitioners including
demographic measures and analyses of travel/traffic patterns.
Hypothesis (H4) is tested using proprietor density in the zip code (proprietors divided by
population of zip code) as a proxy for network opportunities. In studies of network creation,
networks do not form randomly. Rather, people such as small business owners interact most
frequently with those in close geographic proximity when they also share common back-
grounds, interests and affiliations (Boschma, 2005; Gertler, 2003). In other words, a high density
of proprietors clustered in a geographical area provides larger opportunities for partners to
actively interact, form networks, and to share resources as a result (e.g., Audretsch, 1998).
Establishment counts of banks and McDonald's, and the density of proprietors in a zip code,
were logged to reduce the possible effects of outliers. We add one before logging the counts
because many zip codes had zero banks or McDonald's; the log of zero does not exist. The log-
ged values were then interacted with proportional representation to test (H2)–(H4).
3.10 | Control variables from the 1990 U.S. population census zip-code
level data
We included 10 control variables in Equation (2) because they may be correlated with both
proportional representation and with the βWZIP coefficients and because several are important
predictors of the gender wage gap (e.g., Blau, 1998). We included the proportions of (1) house-
holds that are headed by women and (2) individuals who are 25–49 year-old women in 1990.
We included two variables related to education: the proportions of residents that (3) are high
school graduates and (4) are enrolled in a four-year college. Additional demographics
included (5) median household income and the proportions of residents that (6) live in an
urban area, (7) are African-American, (8) are of Latino origin and (9) work from their home.
Finally, as per Kalnins and Williams (2014), we include (10) a binary variable that indicates
whether a zip code lies within one of Texas' six largest cities, those with populations over a
half million.
4 | D E S CR I P T I V E ST AT I S TI C S A ND R E S UL T S
4.1 | Second-step descriptive statistics
Table 1 shows descriptive statistics and bivariate correlations for all variables used in all regres-
sions. There is an observation for each zip code for each year with five or more male entrants
14
T A B L E 1 Full correlations
(01) (02) (03) (04) (05) (06) (07) (08) (09) (10) (11) (12) (13) (14) (15) (16) (17) (18)
WZIP
(01) β , estimated using 1990–2003 data. 1.00
(02) Proportional representation −.13 1.00
(03) Log (banks +1) in zip code −.07 .22 1.00
(04) Banks × proportional representation −.11 .54 .92 1.00
(05) Customer presence in zip (log [McD + 1]) −.02 −.02 .44 .36 1.00
(06) Customers × proportional representation −.05 .18 .47 .47 .96 1.00
(07) Network opportunities in zip code .01 .03 .12 .11 −.01 .00 1.00
(log[proprietor density + 1])
(08) Networks x proportional representation −.04 .34 .21 .31 −.02 .05 .91 1.00
(09) Proportion households headed by a woman .05 −.33 −.15 −.25 .10 .01 −.14 −.27 1.00
(10) Proportion 25–49 year olds that are female .01 .14 −.04 .01 −.01 .01 −.27 −.22 .18 1.00
(11) Proportion high school graduates −.16 .50 .20 .35 .02 .13 .00 .14 −.61 .08 1.00
(12) Proportion in four-year college −.10 .05 .14 .14 .12 .11 −.04 −.03 −.15 −.24 .31 1.00
(13) Median household income (Log 0000 s) −.13 .55 .13 .31 −.01 .12 −.07 .09 −.58 .19 .83 .00 1.00
(14) Proportion residing in urban area −.15 .09 .12 .15 .25 .25 −.07 −.07 .22 −.01 .25 .28 .21 1.00
(15) Zip code in large city (>½ million residents) −.13 .17 −.01 .07 .12 .15 −.05 −.02 .12 −.10 .25 .15 .27 .57 1.00
(16) Proportion African-American .00 −.04 −.16 −.17 −.04 −.04 −.01 −.07 .63 −.03 −.18 −.01 −.27 .14 .14 1.00
(17) Proportion of Latino origin .07 −.37 −.06 −.17 .17 .07 −.07 −.19 .47 .03 −.67 −.07 −.52 .13 .02 −.17 1.00
(18) Proportion working from home .00 .21 .07 .14 −.17 −.12 .20 .34 −.33 −.03 .06 −.01 .05 −.31 −.17 −.24 −.12 1.00
Descriptive statistics (01) (02) (03) (04) (05) (06) (07) (08) (09) (10) (11) (12) (13) (14) (15) (16) (17) (18)
Mean .02 .41 1.52 .63 .60 .24 .02 .01 .11 .50 .74 .07 1.35 .69 .49 .10 .22 .03
Standard deviation .29 .08 .75 .36 .48 .20 .01 .00 .05 .03 .16 .05 .28 .44 .50 .15 .24 .01
Minimum −2.99 .14 .00 .00 .00 .00 .00 .00 .00 .12 .19 .00 .46 .00 .00 .00 .00 .00
Maximum 2.78 .78 3.56 2.24 2.08 1.43 .73 .20 .42 .58 1.00 .82 2.32 1.00 1.00 .96 .99 .32
KALNINS AND WILLIAMS
and five or more female entrants. For each year from 1990 through 2003 there are between
870 and 1,043 zip code-year observations that meet the five male/five female criterion.
We weight means and standard deviations in Table 1, and all observations in all regressions
in Table 2 by the total sum of proprietorship entrants in each zip code for each year because of
the large variation in this total (615 vs. 10). The weighting accounts for the greater commercial
importance of larger zip codes (see, e.g., Chatterjee, Hadi, & Price, 2000).
4.2 | Results from the second-step 2SLS IV models to test hypothesis 1
Table 2 displays weighted regression models where the dependent variable is βWZIPYR from
Step 1. The first model is a baseline of control variables without the hypothesized variables. The
second column adds the proportional representation variable, which has a negative (beneficial
for women) effect on the hazard ratio (Model 2: βPR = −.428, p = .0000015). Comparison with
the baseline demonstrates the substantial additional explanatory power of proportional repre-
sentation (R2 = .058 vs. .051). Column 3 demonstrates robustness of this result when 2SLS IV is
used, via the instrument “Premature Deaths, Quotient of Proportions” (Model 3: βPR = −1.532;
p = .000023). Further, the Cragg–Donald F statistic of 156 far exceeds Staiger and Stock's (1997)
rule of thumb value of 10 for sufficiently strong instruments. We conclude that Hypothesis (H1)
is supported.
The Model 3 coefficient of βPR = −1.532 suggests a substantial magnitude of proportional
representation effects. Relative to a zip code where the survival duration of female-owned
businesses and male-owned businesses is equal (one where proportional representation
was about 46.9%, based on the Model 3 results with all control variables held at their means),
women in a zip code with a proportional representation that is one standard deviation
higher, 9 percentage points higher as per Table 1, should enjoy a hazard ratio of
e−1.532*0.08 = e−0.121 = 0.89. At any point in time, a woman's probability of exit will be about
89% of that of a man in a zip code where proportional representation approaches one standard
deviation above 0.469.
While the effects of proportional representation are substantial in magnitude, they are not
strong enough to create a bimodal landscape of full gender segregation in ownership, that is,
one set of areas entirely populated by female owners and another by male owners. Such
extremes are avoided by the fact that, among all the zip code-years included in our analysis,
the proportional representation of entrants is only correlated .55 with that of existing busi-
nesses. So even when a zip code has a very high or very low proportional representation
among the existing owners, and this proportional representation corresponds to a hazard ratio
substantially above or below one, respectively, the proportional representation of entrants in
that zip code in 1 year may often be closer to the statewide average than to that of the existing
businesses in that zip code-year. Each year, a new supply of men and women enters all zip
codes even though the existing business base may favor one gender over the other. Because it
is the combination of βPR and the correlation between proportional representations of entrants
and of existing businesses that determines the potential for bimodality, this new supply keeps
businesses of both genders viable. In simulations, we found that given the true entrant/existing
correlation of .55, a hypothetical βPR <−2.0 would be required to create the bimodal landscape
of full gender segregation. Alternatively, the true coefficient from Model 3, βPR = −1.532,
would have to be combined with a hypothetical entrant/existing correlation >.7 to generate
the bimodal landscape.
T A B L E 2 Regression of female/male owner hazard ratio (βWZIP) on zip code characteristics
WLS: Baseline & (H1) 2SLS IV WLS; (H2)–(H4): Individual & Omnibus
N = 13,894 Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7

Proportional −.428 −1.532 −.096 −.346 −.289 .013
Representation (H1) (.055) (.361) (.094) (.059) (.061) (.095)
Log (banks +1) in zip −.018 −.010 .011 .076 .056
(.004) (.004) (.007) (.016) (.019)
Banks × proportional −.205 −.160
Representation (H2) (.039) (.046)
Customer presence in zip, .014 .007 −.011 .087 .052
(log [McDonald's + 1]) (.005) (.005) (.008) (.015) (.019)
Customers × proportional −.210 −.110
Representation (H3) (.039) (.048)
Network opportunities .055 .095 .198 2.509 1.999
(log [prop. Density + 1]) (.227) (.229) (.219) (.779) (.764)
Networks × proportional −8.525 −6.608
Representation (H4) (2.357) (2.237)
Proportion households −.190 −.277 −.502 −.286 −.313 −.293 −.288
Headed by a woman (.126) (.121) (.160) (.110) (.111) (.123) (.118)
Proportion 25–49 years .112 .217 .487 .216 .225 .203 .200
Olds that are women (.098) (.097) (.105) (.091) (.092) (.097) (.094)
Proportion high −.191 −.188 −.180 −.206 −.199 −.206 −.213
School graduates (.033) (.034) (.034) (.036) (.037) (.035) (.035)
Proportion in −.244 −.215 −.140 −.212 −.235 −.233 −.233
Four-year college (.063) (.065) (.067) (.062) (.063) (.065) (.064)
Log med. household −.047 .010 .154 .014 .014 .005 .008
Income (.021) (.026) (.058) (.026) (.026) (.025) (.025)
Proportion residing −.046 −.046 −.048 −.041 −.047 −.045 −.041
In urban area (.006) (.005) (.005) (.005) (.005) (.004) (.005)
Zip code in large city −.029 −.024 −.012 −.022 −.022 −.022 −.022
(> ½M residents) (.007) (.007) (.007) (.007) (.007) (.007) (.007)
Proportion African- −.022 .033 .176 .022 .046 .024 .009
American (.027) (.029) (.061) (.027) (.026) (.030) (.031)
Proportion Latino −.020 −.014 .001 −.016 −.016 −.024 −.030
Origin (.022) (.023) (.026) (.023) (.022) (.024) (.023)
Proportion working −.698 −.263 .859 −.216 −.273 −.055 −.030
From home (.131) (.135) (.342) (.127) (.131) (.170) (.172)
2
R .051 .058 .059 .058 .058 .060
Note: Fixed effects and clusters for all years (1990–2003) in all regressions. Robust standard errors in parentheses.
4.3 | Results from second-step WLS models to test

hypotheses (H2)–(H4)
Columns 4–7 of Table 2 display weighted regression models that test Hypotheses (H2)–(H4).
Because we are interested in interaction hypotheses of stakeholder presence and proportional
representation in these models, rather than finding an unbiased coefficient for proportional rep-
resentation as we did in Table 2, we use the WLS proportional representation value rather than
the instrumented effect. Bun and Harrison (2019, p. 814) demonstrate that, as long as one pri-
mary term is exogenous, “the ordinary least squares (OLS) estimator of the coefficient of the
interaction term is consistent and standard OLS inference applies.” We believe that the pres-
ence of banks, McDonald's restaurants, and the local density of proprietors can be viewed as
exogenous from the perspective of proportional representation of women among small business
owners and their relative survival duration.
In the separate test and omnibus test for (H2) in Columns 4 and 7, respectively, the coeffi-
cient of the interaction term “Banks × Proportional Representation” indicates support for the
hypothesis (Model 4: β = −.205, p = .000076; Model 7: β = −.160; p = .00213). In the two tests
of (H3) in Columns 5 and 7, the coefficients of “Customers × Proportional Representation”
indicate support for the hypothesis (Model 5: β = −.210, p = .000038; Model 7: β = −.110,
p = .023). In the two tests of H4 in Columns 6 and 7, the coefficients of
“Networks × Proportional Representation” indicate support for the hypothesis (Model 6:
β = −8.525, p = .0022; Model 7: β = −6.608; p = .0065). The consistency of p-values of the sepa-
rate tests and the omnibus test indicates robustness: the presence or absence of the other two
interaction terms does not change the interactive effect associated with any of the three
hypotheses.
4.4 | Magnitudes of interaction effects from Hypotheses (H2)–(H4)
Figures 1–3 illustrate the magnitudes of joint effects of the primary variables and interaction
terms, with all other variables held at their mean values. Each line within a figure represents
the relationship between proportional representation and relative survival duration, measured
by βWZIPYR, for a specific value (low, mean, and high) of the relevant moderating variable, that
is, number of banks, customer presence (number of McDonald's), and network opportunities
(proprietor density). All three figures demonstrate that the interaction effects of stakeholder
presence and proportional representation have a substantial effect on the relative survival dura-
tion of female versus male-owned businesses, and that stakeholder presence is most beneficial
for women owners when proportional representation is high.
In Figure 1, the case of banks, all three lines have downward slopes with low p-values,
including the flattest line for “2 banks,” which has a slope of −0.25 and a p-value of .002.1 As
predicted by Hypothesis (H2), the more banks the steeper the slope. We compare the effects of
banks at three levels of proportional representation: low (0.33, 1 SD below mean), medium
(0.41, the mean), and high (0.49, 1 SD above the mean). When proportional representation is
low, the effects of 8.5 banks in a zip code (approximately 1 SD above the mean, when de-logged)
relative to the “2 banks” line (approximately 1 SD below the mean, de-logged), is Δβ ≈ +0.01
where β refers to βWZIPYR, the measure of relative survival duration. The positive sign of Δβ
1
Analyzed using the Aiken and West (1991) “simple slopes” method described on pages 14–21.
F I G U R E 1 Interaction effects. Banks × proportional representation interaction
F I G U R E 2 Interaction effects. Customer presence × proportional representation interaction
implies that the presence of banks hurts the relative survival of women-owned businesses. But
when the proportional representation is at the mean (0.41), the effects of 8.5 banks relative to
two banks flips signs and becomes Δβ ≈ −.01. The beneficial effect of the greater presence of
banks for women owners quadruples becoming Δβ ≈ −.04, when proportional representation is
high (0.49, 1 SD above the mean) relative to the mean (.41).
As predicted by Hypothesis (H3) and shown in Figure 2, the greater the customer presence
the steeper the slope. Again, all three lines have downward slopes with low p-values, including
the flattest line when there are no McDonald's in a zip code, which has a slope of −0.36 and a
p-value of .00002. When the representation is low (0.33), the average effect on the hazard ratio
of women's businesses relative to men's is β ≈ .08 when there are three McDonald's in a zip
(approx. 1 SD above the mean, de-logged), which is about 1.38 times larger than when there are
no McDonald's in a zip (approx. 1 SD below the mean; β ≈ .058). In the case where proportional
representation is at its mean, the Δβ shrinks to virtually zero; all three lines intersect at this
point. When proportional representation is high (.49), the presence of McDonald's becomes
F I G U R E 3 Interaction effects. Network opportunities × proportional representation interaction
beneficial for women owners. A count of three McDonald's in a zip code is associated with
β ≈ −.022 while a count of zero McDonald's yields competitive parity for men and women.
These two figures demonstrate that the interaction effects of stakeholder presence and propor-
tional representation have a substantial impact on the relative survival duration of female- ver-
sus male-owned businesses, but that stakeholder presence is only beneficial for women owners
when proportional representation is not low.
Figure 3 displays the interaction effect of network opportunities and proportional represen-
tation. As predicted by Hypothesis (H4), the more networking opportunities the steeper the
slope. Again, all three lines have downward slopes and low p-values, including the flattest line
where the proprietor density is 0.2%, which has a slope of −.31 and a p-value of .00014. Unlike
the cases of banks and customer presence, when proportional representation is low (0.33), there
is already a small relative beneficial effect (Δβ ≈ −.008) of high proprietorship density (3%;
approx. 1 SD above the mean) compared to low (0.2%; approx. 1 SD below the mean). As pro-
portional representation gets larger, the relative beneficial effect increases to Δβ ≈ −.026 at
mean proportional representation and to Δβ ≈ −.044 when proportional representation is high.
The interaction of network opportunities with proportional representation is stronger than
those with banks and customer presence because the network opportunities are beneficial for
women even at low levels of proportional representation, but like the two stakeholder interac-
tion terms the relative benefit increases substantially when the proportional representation is
high, and becomes an absolute benefit for women owners relative to men.
We conclude that our interaction effects are not only important due to low p-values, but also
are of sufficient magnitude to be worthy of attention by business owners and policymakers.
4.5 | Robustness tests
First, we have so far only tested proprietorships. Our database also lists 454,000 incorporated
firms for which only a corporation name is provided, and thus gender is difficult to identify.
But via the Texan incorporation database we could identify the registered agent of 253 K out of
the 454 K incorporated firms. We note this 46% identification rate is much lower than for our
proprietorships, where we identified almost 95%. The registered agent is almost always the
owner if the field is filled, but it is often left blank. Large companies with many outlets typically
leave the field blank for their outlets. Women were registered agents for only 17% of the 253 K
outlets that we could gender-identify. Nonetheless, all hypotheses that we tested using proprie-
torships remain supported for this completely nonoverlapping set of businesses.
Second, Table 1 shows that several control variables are correlated with the hypothesized
variables at levels that could plausibly generate Type 1 errors (> |0.3| as per Kalnins, 2018). Pro-
portional representation is correlated at this level or above with (09) Proportion households
headed by a woman; (11) Proportion high school graduates; (13) Median household income;
and (17) Proportion of Latino Origin, as are some of our hypothesized interaction variables. For
this reason, we followed the suggestion of Kalnins (2018) to estimate regressions that exclude
these variables as a robustness test. All hypotheses were supported with and without these
controls.
Third, we added (1) a spatial lag of the dependent variable using the “spatial IV” method
(Anselin, 1988) and (2) county fixed effects to the specifications of Table 2. These controls are
alternate approaches for dealing with the possibility that neighboring zip codes have common-
alities in their effects. The spatial lag is substantial in magnitude with values between 0.3 and
0.4 as is common for such lags and all hypotheses remain supported. All hypotheses also
remain supported when we include county fixed effects.
Fourth, methodologists (Cortina, 1993; Ganzach, 1997) have suggested that quadratic terms
of primary variables should be included in regressions with interaction terms when the primary
terms are correlated: nonlinearities of primary terms may falsely appear as interaction term
effects if not properly controlled for. While the correlations of proportional representation with
the three primary terms are not large, we estimated regressions identical to those in Table 2 but
now the quadratic terms for proportional representation, banks, customers, and proprietor den-
sity are included. All hypotheses remain supported.
Fifth, we re-estimated Table 2 using unweighted zip code observations. Weighting observa-
tions by number of proprietorship entrants is an appropriate approach because a zip code with
100 entrant businesses in a year contains more economic information than one with 20, for
example. Overall the unweighted regressions explained only 50% of the variance of the
weighted regressions of Table 2 (R2 = .029 vs. .058 for Column 2; .03 vs. .06 for Column 7), con-
firming the logic above that the weighted regressions are a better fit. Nonetheless all hypotheses
remain supported and with one exception are robust. Only the omnibus test of Column 7 shows
weakness regarding the customer presence interaction term (H3), suggesting that support for
that hypothesis is not as robust as for the others.
Sixth, we estimated regressions using raw and logged counts of women owners in a zip code
rather than proportional representation. All hypotheses remained supported both for raw and
logged counts, except for (H3), suggesting again that support for that hypothesis is not as robust
as for the others.
Finally, we note that approximately 7% of our business exits transferred ownership. We
include these as exits in the main analysis, but they can be treated as right-censored (i.e., they
leave the data set without a negative outcome) or deleted outright in Weibull models with no
changes in signs and small changes in magnitudes. All hypotheses remain supported.
4.6 | Caveats
We briefly state three caveats. First, as we discussed in the data description section, our sales
tax-based database contains no firms that do not ever serve the end consumer. Thus, we cannot
test whether our results would hold among manufacturing firms, business-to-business or purely
wholesale ventures. However, given that since the mid-1980s more U.S. business owners and
workers are employed in retail trades than in manufacturing (Bureau of Labor Statistics, 2010),
we believe that our contribution remains compelling even if limited to those firms that serve, at
least in part, the retail and consumer service sectors.
Second, we only analyzed business activity within one geographic area of one nation. Yet
Texas contains (i) a wide variety of area types (e.g., urban, suburban, rural, wealthy, poor, major
highways, and coastal resorts) that appear representative of those existing throughout the
nation and (ii) substantial variation in proportional representation from one geographic area to
another. We believe that these facts together suggest at least some generalizability of our
results.
Finally, we state that our hypotheses do not test the cognitive processes associated with
social categorization, but rather we test the macro-level implications of these processes, which
occur at the local community level. The underlying mechanisms of social categorization pro-
cesses are beyond dispute at this time (Hogg & Terry, 2000); if they were in fact not operating
in our setting we would be unlikely to observe the results we have reported here. In this way,
our work is similar to that of sociology on network homophily (Block & Grund, 2014;
Ibarra, 1992) and work in economics on quotas for women on local government councils
(Beaman et al., 2009). Some of this work is based completely on community-level measures like
ours (e.g., see Beaman et al., 2009). Thus, our work follows a well-established tradition for
assuming the presence of social categorization processes as a given and testing the community-
level impacts of social categorization theory.
5 | DISCUSSION
We developed theory that highlights the important but ignored role of the proportional repre-
sentation of female business owners in a geographical area to explain survival duration differ-
ences between female- and male-owned businesses. Our theoretical perspective on gender and
business ownership incorporated logic from two literature streams: (i) social categorization pro-
cesses (Fiske et al., 2002) and (ii) stakeholder theories (Aldrich & Fiol, 1994; Freeman &
Reed, 1983) and is informed by a robust set of findings from the small business finance and
women's entrepreneurship literatures. We found that, relative to firms owned by men, female-
owned proprietorships survived longer in geographic areas where proportional representation
was greater. Further, our theory regarding the importance of stakeholders is borne out by the
interaction results regarding the presence of banks, customers and network opportunities.
5.1 | Contributions and future directions
Our study makes several contributions with implications for future research. First, our findings
have demonstrated that the proximate presence of stakeholders can magnify the effect of pro-
portional representation for improving the survival duration of woman-owned firms relative to
those owned by men. Our result for the synergistic interaction of proportional representation
and banks is of particular interest because it suggests an explanation for the mixed findings
regarding whether women owners are discriminated against by financial institutions (see,
e.g., Jennings & Brush, 2013; Parker, 2009, for reviews with differing perspectives on this issue).
Our results suggest the possibility that findings of lending discrimination emerge from samples
where overall proportional representation of female business owners may be low, while lending
equality might emerge from samples with high overall proportional representation. Our study
opens the way for investigating the relationship among banks and proportional representation
for other demographic categories such as race and ethnicity, where the effect of proportional
representation may differ because of more intransigent stereotypes or systematic
discrimination.
Second, our study suggests that the effects of gender composition are more pervasive than
previously demonstrated. As cited in our hypothesis development section, many scholars have
studied within-firm proportional representation. In contrast, this article investigated the effect
of proportional representation among owners across firms. Our findings suggest that propor-
tional representation in a geographic area can affect firm survival much as proportional repre-
sentation within a firm affects individual career outcomes.
Building on the pervasive effects of proportional representation suggested by this study,
future research would benefit from investigating whether the effects of proportional repre-
sentation in a geographic area influence the preferences of female business owners them-
selves. Croson and Gneezy (2009), for instance, reviewed academic work from the disciplines
of economics, psychology and management on gender-specific risk preferences, social prefer-
ences, and competitive preferences. Relative to men, women have been shown to exhibit
higher levels of risk aversion, a greater desire to avoid competition, and lower interest in
financial rewards. Much of this literature treats these preferences, implicitly or explicitly, as
innate traits of men and women, thus neither malleable in nature nor heterogeneous across
contexts such as geographic locales. Croson and Gneezy (2009) state that they use the empiri-
cal regularities on preferences as a starting point to illuminate the debate on gender-specific
outcomes, such as the establishment-level survival duration that we study here. However,
because proportional representation affects outcomes, we believe that our findings suggest
that proportional representation is likely to play a role in shaping underlying business-
related preferences and in altering their impact on performance. Moreover, given that the
proportional representation of female politicians on local councils has been found to give
women the confidence to report crimes against them (Iyer, Mani, Mishra, & Topalova, 2012)
and more motivation to pursue education (Beaman et al., 2012), it may also be likely that
female business owners in geographical areas with high proportional representation
would feel less risk-aversion or competition-aversion than those in low proportional repre-
sentation areas.
Finally, we believe our work on geography could be extended to industry, that is, propor-
tional representation within an industry might well affect the hazard ratio similarly to the pre-
dictions here for geographical areas. Kalnins and Williams (2014) demonstrated that female-to-
male owner hazard ratios do vary substantially by industry. Proportional representation may
play a role in explaining these variations. Unlike geographical areas, however, many industries
are inherently gendered based on historical proportion of wage employees that are women
(England, 1992). The proportional representation of female wage employees has often been
associated with lower wage industries (Reskin, 1993). Further, within female-dominated indus-
tries, men often enjoy wage advantages (Reskin & Ross, 1992). Therefore, it is not clear whether
proportional representation of women owners would have beneficial effects across industries as
in our geographic case, or detrimental effects like the case of proportional representation of
female employees in low-wage industries. We conclude that delineating the role of these forces
in shaping relative survival duration is an important topic for future research.
5.2 | Implications for policy and practice
We present two policy implications of this study. First, as per our introduction, a Boston Con-
sulting Group study found that the combination of increasing (i) proportional representation of
women owners, and (ii) survival duration of their businesses could add $2.5–$5 trillion dollars
of value to the world's economy, (Unnikrishnan & Hanna, 2019). However, neither that study
nor the previous literature had considered the possibility that the two constructs are linked the-
oretically and in practice. Policy studies (e.g., Marlow, Carter, & Shaw, 2008; Small Business
Service, 2003; Wilson, Whittam, & Deakins, 2004) have asked the question whether
policymakers should focus on encouraging greater female participation as business owners or
on increasing the survival and performance of existing female-owned businesses. Our theory
and results suggest that increasing proportional representation should help survival duration as
well. Our analyses showed that with a proportional representation of 46.9% women owners, the
average survival duration of female- and male-owned businesses becomes approximately equal.
If proportional representation increases could be encouraged by policymakers in areas with
lower female ownership today (76% of the areas in our sample), the survival duration might
then also attain equality throughout the economy and the benefits suggested by BCG might be
realized.
Second, a common view exists that women embrace entrepreneurship to avoid the glass
ceilings of corporate careers (e.g., Buttner & Moore, 1997; Carr, 1996). However, other scholars
(McAdam, 2013, provides a review) state that the gendered structure of the economic sphere
leads to similar levels of inequality in entrepreneurship as in corporate employment, where the
gender gap in wages is nearly universal across geographic areas. Our proportional
representation-based theory has provided a way forward from this dichotomy by predicting a
continuum of outcomes across geographic areas ranging from survival duration equality for
men and women to substantial levels of inequality disadvantaging women. As we proposed in
the introduction, our theory and results have bridged the gulf between the opposing perspec-
tives (i) that entrepreneurship acts as a “great equalizer” for women and (ii) that biases and ste-
reotypes are as detrimental to women in entrepreneurship as they are to women in corporate
employment. Our results suggest that entrepreneurship can act as an equalizer for women, but
that in low proportional representation areas, women may face similar disadvantages, relative
to men, in both entrepreneurship and corporate employment.
6 | C ON C L U S I ON
Business ownership in the United States has reached a steady state in which the proportional
representation of women owners is substantial but remains short of parity with men. We theo-
rized and examined proportional representation of female business owners within geographic
areas and found a robust positive relationship between local proportional representation and
women's business survival duration, relative to that of male owners. We integrated stakeholder
theory with social categorization theory to examine effects on survival duration of stakeholders
such as banks, customers, and network opportunities, in combination with proportional repre-
sentation. We demonstrated that the proximate presence of stakeholders can magnify the effect
of proportional representation for improving the relative survival duration of woman-owned
firms. Our findings suggest that the effects of proportional representation are more pervasive
than had been examined previously by management scholars. We hope that our results
encourage further theoretical development around proportional representation and that

policymakers use our findings to inform programs for female business owners.
ORCID
Arturs Kalnins https://orcid.org/0000-0002-1963-3911
Michele Williams https://orcid.org/0000-0002-4921-4371
R EF E RE N C E S
Abdullah, S. N., Ismail, K. N. I. K., & Nachum, L. (2016). Does having women on boards create value?
The impact of societal perceptions and corporate governance in emerging markets. Strategic Management
Journal, 37(3), 466–476.
Adler, P. S. (2001). Market, hierarchy, and trust: The knowledge economy and the future of capitalism. Organiza-
tion Science, 12(2), 215–234.
Agarwal, S., & Hauswald, R. (2010). Distance and private information in lending. Review of Financial Studies,
23(7), 2757–2788.
Ahl, H. (2006). Why research on women entrepreneurs needs new directions. Entrepreneurship Theory and Prac-
tice, 30(5), 595–621.
Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Newbury Park, CA: Sage.
Aldrich, H. E., & Fiol, C. M. (1994). Fools rush in? The institutional context of industry creation. Academy of
Management Review, 19(4), 645–670.
Alvesson, M., & Billing, Y. D. (2009). Understanding gender and organization (2nd ed.). London: Sage.
Andersson, M., Larsson, J. P., & Öner, Ö. (2017). Ethnic enclaves and immigrant self-employment: A neighbor-
hood analysis of enclave size and quality (No. 1195). IFN Working Paper.
Anselin, L. (1988). Spatial econometrics: Methods and models. Dordrecht: Kluwer Academic.
Audretsch, D. B. (1998). Agglomeration and the location of innovative activity. Oxford Review of Economic Policy,
14(2), 18–29.
Backhans, M., Lundberg, M., & Mansdotter, A. (2007). Does increased gender equality lead to a convergence of
health outcomes for men and women? A study of Swedish municipalities. Social Science and Medicine, 64(9),
1892–1903.
Beaman, L., Chattopadhyay, R., Duflo, E., Pande, R., & Topalova, P. (2009). Powerful women: Does exposure
reduce bias? Quarterly Journal of Economics, 124(4), 1497–1540.
Beaman, L., Duflo, E., Pande, R., & Topalova, P. (2012). Female leadership raises aspirations and educational
attainment for girls: A policy experiment in India. Science, 335, 582–586.
Berger, A. N., & Udell, G. F. (2002). Small business credit availability and relationship lending: The importance
of bank organisational structure. Economic Journal, 112(477), F32–F53.
Berger, P. L., & Luckmann, T. (1966). Social construction of reality: A treatise in the sociology of knowledge. Gar-
den City, NY: Anchor Books.
Bettis, R., Gambardella, A., Helfat, C., & Mitchell, W. (2014). Quantitative empirical analysis in strategic man-
agement. Strategic Management Journal, 35(7), 949–953.
Blau, F. D. (1998). Trends in the well-being of American women: 1970–1995. Journal of Economic Literature,
36(1), 112–165.
Block, P., & Grund, T. (2014). Multidimensional homophily in friendship networks. Network Science, 2(2),
189–212.
Boschma, R. (2005). Proximity and innovation: A critical assessment. Regional Studies, 39(1), 61–74.
Braun, H., Jones, D. H., Rubin, D. B., & Thayer, D. T. (1983). Empirical Bayes estimation of coefficients in the
general linear-model from data of deficient rank. Psychometrika, 48(2), 171–181.
Bun, M. J., & Harrison, T. D. (2019). OLS and IV estimation of regression models including endogenous interac-
tion terms. Econometric Reviews, 38(7), 814–827.
Bureau of Labor Statistics. (2010). Summary Table B. employment, hours and earnings of employees on nonfarm
payrolls, seasonally adjusted. Available from http://www.citizen.org/documents/Historical_employment_
data.pdf.
Buttner, E. H., & Moore, D. P. (1997). Women's organizational exodus to entrepreneurship: Self-reported motiva-
tions and correlates with success. Journal of Small Business Management, 35(1), 34.
Carboni, I., Cross, R., Page, A., & Parker, A. (2019). How successful women manage their networks, connected
commons. Available from https://connectedcommons.com/wp-content/uploads/2019/09/how-successful-
women-manage-their-networks-v2.pdf
Carr, D. (1996). Two paths to self-employment? Women's and men's self-employment in the United States, 1980.
Work and Occupations, 23(1), 26–53.
Chatterjee, S., Hadi, A., & Price, B. (2000). Regression analysis by example. New York: Wiley.
Chau, K. W., & Pretorius, F. (2001). Labelling Effects and the Price of Street Level Retail Shops. The Sixth Annual
AsRES Conference, Tokyo, Japan.
Chen, G., Crossland, C., & Huang, S. (2016). Female board representation and corporate acquisition intensity.
Strategic Management Journal, 37(2), 303–313.
Comer, L., & Jolson, M. (1991). Perceptions of gender stereotypic behavior: An exploratory study of women in
selling. Journal of Personal Selling & Sales Management, 11(1), 43–59.
Cortina, J. M. (1993). Interaction, nonlinearity, and multicollinearity: Implications for multiple regression. Jour-
nal of Management, 19(4), 915–922.
Crisp, C. B., & Jarvenpaa, S. L. (2013). Swift trust in global virtual teams. Journal of Personnel Psychology., 12(1),
45–56.
Croson, R., & Gneezy, U. (2009). Gender differences in preferences. Journal of Economic Literature, 47(2),
448–474.
Dahl, M. S., & Sorenson, O. (2012). Home sweet home: Entrepreneurs' location choices and the performance of
their ventures. Management Science, 58(6), 1059–1071.
Degryse, H., & Ongena, S. (2005). Distance, lending relationships and competition. Journal of Finance, 40(1),
231–266.
Dezsö, C. L., & Ross, D. G. (2012). Does female representation in top management improve firm performance? A
panel data investigation. Strategic Management Journal, 33(9), 1072–1089.
Ding, W. W., Murray, F., & Stuart, T. E. (2013). From bench to board: Gender differences in university scientists'
participation in corporate scientific advisory boards. Academy of Management Journal, 56(5), 1443–1464.
Dixon-Fowler, H. R., Ellstrand, A. E., & Johnson, J. L. (2013). Strength in numbers or guilt by association? Intra-
group effects of female chief executive announcements. Strategic Management Journal, 34(12), 1488–1501.
Ely, R. J. (1995). The power in demography: Women's social construction of gender identity at work. Academy of
Management Journal, 38(3), 589–634.
Ely, R. J., & Padavic, I. (2007). A feminist analysis of organizational research on sex differences. Academy of
Management Review, 32(4), 1121–1143.
England, P. (1992). Comparable worth: Theories and evidence. New York: Aldine de Gruyter.
Ferrin, D. L., Bligh, M. C., & Kohles, J. C. (2008). It takes two to tango: An interdependence analysis of trust and
cooperation spirals in interpersonal and intergroup relationships. Organizational Behavior and Human Deci-
sion Processes, 107(2), 161–178.
Festinger, L., Schachter, S., & Back, K. (1950). Social pressures in informal groups: A study of human factors in
housing. New York: Harper.
Fiske, S. T., Cuddy, A. J. C., Glick, P., & Xu, J. (2002). A model of (often mixed) stereotype content: Competence
and warmth respectively follow from perceived status and competition. Journal of Personality and Social Psy-
chology, 82(6), 878–902.
Fiske, S. T., & Taylor, S. E. (1991). Social cognition. New York: McGraw-Hill.
Florin, J., Lubatkin, M., & Schulze, W. (2003). A social capital model of high-growth ventures. Academy of Man-
agement Journal, 46(3), 374–384.
Freeman, R. E., & Reed, D. L. (1983). Stockholders and stakeholders: A new perspective on corporate gover-
nance. California Management Review, 25(3), 93–94.
Friedman, M. (1957). A theory of the consumption function. Princeton, NJ: Princeton University Press.
Gallagher, A. C., & Chen, T. (2008). Estimating Age, Gender, and Identity Using First Name Priors. Computer
Vision and Pattern Recognition, IEEE Conference on CVPR (pp. 1–8).
Gallagher, A. C., & Chen, T. (2009). Using context to recognize people in consumer images. IPSJ Transactions on
Computer Vision and Applications, 1, 115–126.
Ganzach, Y. (1997). Misleading interaction and curvilinear terms. Psychological Methods, 2, 235–247.
Gertler, M. S. (2003). Tacit knowledge and the economic geography of context. Journal of Economic Geography,
3, 75–99.
Granovetter, M. S. (1973). The strength of weak ties. American Journal of Sociology, 78, 1360–1380.
Greenwald, A. G., Poehlman, T. A., Uhlmann, E. L., & Banaji, M. R. (2009). Understanding and using the
implicit association test: III. Meta-analysis of predictive validity. Journal of Personality and Social Psychology,
97(1), 17.
Gupta, V. K., Mortal, S. C., & Guo, X. (2018). Revisiting the gender gap in CEO compensation: Replication and
extension of hill, Upadhyay, and Beekun's (2015) work on CEO gender pay gap. Strategic Management Jour-
nal, 39(7), 2036–2050.
Guzman, J., & Kacperczyk, A. (2019). Gender gap in entrepreneurship. Research Policy, 48, 1666–1680.
Hanson, S., & Blake, M. (2009). Gender and entrepreneurial networks. Regional Studies, 43, 135–149.
Hanson, S., & Pratt, G. (1991). Job search and the occupational segregation of women. Annals of the Association
of American Geographers, 81(2), 229–253.
Headd, B. (2003). Redefining business success: Distinguishing between closure and failure. Small Business Eco-
nomics, 21(1), 51–61.
Heilman, M. E. (2012). Gender stereotypes and workplace bias. Research in Organizational Behavior, 32,
113–135.
Hogg, M. A., & Terry, D. I. (2000). Social identity and self-categorization processes in organizational contexts.
Academy of Management Review, 25(1), 121–140.
Hoobler, J. M., Masterson, C. R., Nkomo, S. M., & Michel, E. J. (2018). The business case for women leaders:
Meta-analysis, research critique, and path forward. Journal of Management, 44(6), 2473–2499.
Hsieh, H. P., Li, C. T., & Lin, S. D. (2015). Estimating Potential Customers Anywhere and Anytime based on
Location-based Social Networks. Joint European Conference on Machine Learning and Knowledge Discovery
in Databases. Springer, Cham. pp. 576–592.
Ibarra, H. (1992). Homophily and differential returns: Sex differences in network structure and access in an
advertising firm. Administrative Science Quarterly, 37, 422–447.
Idrovo, A., & Casique, I. (2006). Women's empowerment and life expectancy at birth in Mexico. Pan American
Journal of Public Health, 20(1), 29–38.
Ingram, P., & Roberts, P. W. (2000). Friendships among competitors in the Sydney hotel industry. American
Journal of Sociology, 106, 387–423.
Iyer, L., Mani, A., Mishra, P., & Topalova, P. (2012). The power of political voice: Women's political representa-
tion and crime in India. American Economic Journal: Applied Economics, 4(4), 165–193.
Jack, S. L. (2005). The role, use and activation of strong and weak network ties: A qualitative analysis. Journal of
Management Studies, 42(6), 1233–1259.
Jennings, J. E., & Brush, C. G. (2013). Research on women entrepreneurs: Challenges to (and from) the broader
entrepreneurship literature? Academy of Management Annals, 7(1), 663–715.
Jones, E., Moore, J. N., Stanaland, A. J., & Wyatt, R. A. (1998). Salesperson race and gender and the access and
legitimacy paradigm: Does difference make a difference? Journal of Personal Selling & Sales Management, 18
(4), 71–88.
Kahneman, D. (2003). A perspective on judgment and choice: Mapping bounded rationality. American Psycholo-
gist, 58(9), 697.
Kalnins, A. (2018). Multicollinearity: How common factors cause type 1 errors in multivariate regression. Strate-
gic Management Journal, 39(8), 2362–2385.
Kalnins, A., & Chung, W. (2006). Social capital, geography and survival: Gujarati immigrant entrepreneurs in
the U.S. lodging industry. Management Science, 52(2), 233–247.
Kalnins, A., & Lafontaine, F. (2013). Too far away? The effect of distance to headquarters on business establish-
ment performance. American Economic Journal: Microeconomics, 5(3), 157–179.
Kalnins, A., Swaminathan, A., & Mitchell, W. (2006). Turnover events, vicarious information, and the reduced
likelihood of outlet-level exit among small multiunit organizations. Organization Science, 17(1), 118–131.
Kalnins, A., & Williams, M. (2014). When do female-owned businesses out-survive male-owned businesses? A
disaggregated approach by industry and geography. Journal of Business Venturing, 29(6), 822–835.
Kawachi, I., Kennedy, B., Gupta, V., & Prothrow-Stith, D. (1999). Women's status and the health of women and
men: A view from the states. Social Science and Medicine, 48(1), 21–32.
Kramer, R. M., & Lewicki, R. J. (2010). Repairing and enhancing trust: Approaches to reducing organizational
trust deficits. Academy of Management Annals, 4(1), 245–277.
Kray, L. J., Kennedy, J. A., & Van Zant, A. B. (2014). Not competent enough to know the difference? Gender ste-
reotypes about women's ease of being misled predict negotiator deception. Organizational Behavior and
Human Decision Processes, 125(2), 61–72.
Lee, P., & James, E. (2007). She'-E-Os: Gender effects and investor reactions to the announcements of top execu-
tive appointments. Strategic Management Journal, 28(3), 227–241.
Loscocco, K. A., & Bird, S. R. (2012). Gendered paths why women lag behind men in small business success.
Work and Occupations, 39(2), 183–219.
Lyngsie, J., & Foss, N. J. (2017). The more, the merrier? Women in top-management teams and entrepreneurship
in established firms. Strategic Management Journal, 38(3), 487–505.
Marlow, S., Carter, S., & Shaw, E. (2008). Constructing female entrepreneurship policy in the UK: Is the US a rel-
evant benchmark? Environment and Planning C: Government and Policy, 26(2), 335–351.
Marquis, C. (2003). The pressure of the past: Network imprinting in inter-corporate communities. Administrative
Science Quarterly, 48(4), 655–689.
McAdam, M. (2013). Female Entrepreneurship. London, UK: Routledge.
Merrett, C. D., & Gruidl, J. J. (2000). Small business ownership in Illinois: The effect of gender and location on
entrepreneurial success. The Professional Geographer, 52(3), 425–436.
Moore, G. (1990). Structural determinants of men's and women's personal networks. American Sociological
Review, 55, 726–735.
Parker, S. C. (2009). The economics of entrepreneurship. Cambridge, UK: Cambridge University Press.
Petersen, M. A., & Rajan, R. G. (1995). The effect of credit market competition on lending relationships. Quar-
terly Journal of Economics, 110(2), 407–443.
Petersen, M. A., & Rajan, R. G. (2002). The information revolution and small business lending: Does distance still
matter? Journal of Finance, 57(6), 2553–2570.
Post, C., & Byron, K. (2015). Women on boards and firm financial performance: A meta-analysis. Academy of
Management Journal, 58(5), 1546–1571.
Reilly, W. J. (1931). The laws of retail gravitation. New York, NY: Knickerbocker Press.
Reskin, B. (1993). Sex segregation in the workplace. Annual Review of Sociology, 19, 241–270.
Reskin, B., & Ross, C. E. (1992). Jobs, authority, and earnings among managers: The continuing significance of
sex. Work and Occupations, 19(4), 342–365.
Ridgeway, C. L., & Erickson, K. G. (2000). Creating and spreading status beliefs. American Journal of Sociology,
106(3), 579–615.
Rudman, L. A., & Phelan, J. E. (2008). Backlash effects for disconfirming gender stereotypes in organizations.
Research in Organizational Behavior, 28, 61–79.
Salvaneschi, L. (1996). Location, location, location: How to select the best site for your business. Central Point, OR:
Oasis Press/PSI Research.
Sampson, R. J., Morenoff, J. D., & Gannon-Rowley, T. (2002). Assessing "neighborhood effects": Social processes
and new directions in research. Annual Review of Sociology, 28, 443–478.
Semadeni, M., Withers, M., & Trevis Certo, S. (2014). The perils of endogeneity and instrumental variables in
strategy research: Understanding through simulations. Strategic Management Journal, 35(7), 1070–1079.
Shaver, J. M. (1998). Accounting for endogeneity when assessing strategy performance: Does entry mode choice
affect FDI survival? Management Science, 44(4), 571–585.
Small Business Service. (2003). A strategic framework for women's enterprise. London, UK: Kingsgate House.
Staiger, D., & Stock, J. H. (1997). Instrumental variables regression with weak instruments. Econometrica, 65(3),
556–587.
Tajfel, H. (1981). Human groups and social categories: Studies in social psychology. Cambridge, UK: Cambridge
University Press.
Turner, J. C. (1987). Rediscovering the social group: A self-categorization theory. Oxford, UK: Basil Blackwell.
Unnikrishnan, S., & Hanna, R. (2019). The trillion-dollar opportunity in supporting female entrepreneurs. Har-
vard Business Review Reprint H058PY. (October).
Weiler, S., & Bernasek, A. (2001). Dodging the glass ceiling? Networks and the new wave of women entrepre-
neurs. Social Science Journal, 38(1), 85–103.
Wilkinson, R., & Pickett, K. (2009). The spirit level: Why greater equality makes societies stronger. New York:
Bloomsbury Press.
Williams, M., & Polman, E. (2015). Is it me or her? How gender composition evokes interpersonally sensitive
behavior on collaborative cross-boundary projects. Organization Science, 26(2), 334–355.
Wilson, L., Whittam, G., & Deakins, D. (2004). Women's enterprise: A critical examination of national policies.
Environment and Planning C: Government and Policy, 22, 799–815.
Zipf, G. K. (1949). Human behavior and the principle of least effort. Cambridge, MA: Addison-Wesley.
Zucker, L. G. (1986). Production of trust: Institutional sources of economic structure, 1840–1920. Research in
Organizational Behavior, 8, 53–111.
Zuckerman, E. W., & Sgourev, S. V. (2006). Peer capitalism: Parallel relationships in the U.S. economy. American
Journal of Sociology, 111, 1327–1366.
S UP PO RT ING IN FOR MAT ION

Additional supporting information may be found online in the Supporting Information section
at the end of this article.
How to cite this article: Kalnins A, Williams M. The geography of female small
business survivorship: Examining the roles of proportional representation and
stakeholders. Strat Mgmt J. 2021;1–28. https://doi.org/10.1002/smj.3266

Kalnins & Williams (2021) Is An Instance of Outdated Literature Review: Authors Should Provide Complete Picture

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kalnins & Williams (2021) Is An Instance of Outdated Literature Review: Authors Should Provide Complete Picture

Uploaded by

Copyright:

Available Formats

Received: 10 November 2019 Revised: 10 January 2021 Accepted: 12 January 2021

The geography of female small business

Strat Mgmt J. 2021;1–28. wileyonlinelibrary.com/journal/smj © 2021 Strategic Management Society 1

areas with substantial proportional representation of

2.1 | Gender and geography

2.2 | Gender stereotypes and expectations: A review of social

Social categorization processes involve identifying individuals as members of a specific social

2.3 | Perceived competence, stakeholders, and resources

2.3.1 | The role of proportional representation

2.3.5 | Networking opportunities

3 | RESEARCH DESIGN AND ANALYSIS STRATEGY

3.1 | Texas sales and use tax permit holder data

3.2 | The social security baby name data

To determine owner gender of the 1,447,946 proprietorships, we followed the gender-

3.3 | The zip code as the geographic unit of analysis

3.4 | Survival duration

3.5 | Two-step analysis strategy

To investigate the relationship between proportional representation and survival duration, we

3.6 | First step regression: survival duration analysis of individual

hi ðt Þ =p tp − 1 expðX i βÞ, ð1Þ

3.7 | The second-Step regression and the use of an instrumental

βWZIPYR = ðproportional representation on Jan:1 of yearÞβPR +Xβ +ε, ð2Þ

Proportional representation, Jan:1 = ðp:r:instrumentÞβI +Xβ +ζ, ð3Þ

where the proportional representation instrument is described below.

3.8 | The instrument used to test (H1): Premature deaths, quotient of

Premature Deaths, Quotient of Proportions = ðPDw =POPw Þ=ðPDa =POPa Þ ð4Þ

3.9 | The primary variables interacted with proportional

4.1 | Second-step descriptive statistics

4.2 | Results from the second-step 2SLS IV models to test hypothesis 1

T A B L E 2 Regression of female/male owner hazard ratio (βWZIP) on zip code characteristics

N = 13,894 Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7

4.3 | Results from second-step WLS models to test

4.4 | Magnitudes of interaction effects from Hypotheses (H2)–(H4)

F I G U R E 1 Interaction effects. Banks × proportional representation interaction

F I G U R E 2 Interaction effects. Customer presence × proportional representation interaction

F I G U R E 3 Interaction effects. Network opportunities × proportional representation interaction

4.5 | Robustness tests

5.1 | Contributions and future directions

5.2 | Implications for policy and practice

encourage further theoretical development around proportional representation and that

S UP PO RT ING IN FOR MAT ION

You might also like