Gender and Overconfidence in the Kauffman Firm Survey

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While an emerging line of research has begun to examine how firm survival correlates with the psychological trait of overconfidence, almost none of this work looks at how this relationship is mediated or modified by the minority status of the individual within the area of entrepreneurship. We employ a proportional hazard survival model and analyze the Kauffman Firm Survey (KFS) of entrepreneurs during the period of 2004-2012. We find that, while overconfidence relates to firm survival, it is more strongly related to survival for female than for male entrepreneurs. Our analysis is unique in examining the trait of overconfidence for small firm survival, and it is the first that we know of to stratify the effects of this overconfidence by gender. The present work has implications for possible methods and strategies to promote the entrepreneurship of individuals from underrepresented groups, with an eye towards owner-overconfidence helping female-led firms to survive the first few years of a firm’s existence.

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