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And the Children Shall Lead: Gender Diversity and Performance in Venture Capital

Paul Gompers and Sophie Calder-Wang

No 17-103, Harvard Business School Working Papers from Harvard Business School

Abstract: With an overall lack of gender and ethnic diversity in the innovation sector documented in Gompers and Wang (2017), we ask the natural next question: Does increased diversity lead to better firm performances? In this paper, we attempt to answer this question using a unique dataset of the gender of venture capital partners' children. First, we find strong evidence that parenting more daughters leads to an increased propensity to hire female partners by venture capital firms. Second, using an instrumental variable set-up, we also show that improved gender diversity, induced by parenting more daughters, improves deal and fund performances. These effects concentrate overwhelmingly on the daughters of senior partners than junior partners. Taken together, our findings have profound implications on how the capital markets could function better with improved diversity.

JEL-codes: G02 G24 G30 L14 L20 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2017-05
New Economics Papers: this item is included in nep-cfn and nep-dcm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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http://www.hbs.edu/faculty/pages/download.aspx?name=17-103.pdf (application/pdf)

Related works:
Journal Article: And the children shall lead: Gender diversity and performance in venture capital (2021) Downloads
Working Paper: And the Children Shall Lead: Gender Diversity and Performance in Venture Capital (2017) Downloads
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