Performance and innovation in women-owned home-based businesses: Exploring the gender-location link

Abstract

Current figures from the UK suggest that 60% of Small to Medium– Sized Enterprises (SMEs) with no employees and 25% of SME employers locate in the home (BEIS, 2018). In the literature, home-based businesses (HBBs) are often linked to the debates surrounding the specific challenges that female business owners face in growth and performance (Walker & Webster, 2004). Notably, it has been identified that work-life and work-family conflict may lead to low financial performance in women-owned HBBs (Loscocco & Smith, 2004; Thompson et al., 2009). However, the empirical literature on this topic is modest, and it remains unclear whether there is a gender-gap in home-based businesses across different indicators of performance. Thus, the objective of this study is to investigate whether women-owned HBBs underperform men-owned HBBs in turnover, innovation, and employment. Drawing on theory from both economic geography and the small business literature, we also explore the oft-neglected role of location in driving gendered business outcomes (Rosenthal & Strange, 2012; Lee & Marvel, 2014). We use a representative sample of 3,578 home-based businesses from the 2015 UK Longitudinal Small Business Survey (UKLSBS) to conduct the empirical, quantitative analysis. We use multiple regression models to control for key firm demographics that differ between men and women-owned enterprises, including business location and industry. The findings from this study reveal that when controlling for firm demographics, women-owned HBBs do not underperform in turnover or innovation and quite the opposite, they out-perform men-owned HBBs in employment. However, we find that business location plays no role in any measure of business performance in this study. These findings contribute to the growing home-based business literature by highlighting specific processes and peculiarities of the sector that have not previously been tested, and revealing the heterogeneity of women-owned businesses in the under-researched context of the home. The study also serves as a contribution to the growing evidence base that women-owned firms do not underperform men when employing sophisticated, multi-measure and multivariate analysis techniques (Farhat & Migid, 2017; Sappleton, 2018; Zolin et al., 2013) and identifies a rare case of over performance by women-owned enterprises (Marco, 2012).

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ORCID for Darja Reuschke: orcid.org/0000-0001-6961-1801

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