Women in innovative start-ups and regional inclusiveness: ‘green’ and socially-responsible companies

ABSTRACT

We explore the link between women in business decision-making roles, regional gender equality in the workforce and start-up sustainability. We employ unique administrative data on innovative start-ups in Italy and implement a novel crawler-based semantic search of start-ups’ websites to identify ‘green’ firms. Our findings on high-tech innovative start-ups confirm established evidence in the female entrepreneurship literature: greater shares of women in decision-making roles increase the probability of a social focus but decrease the likelihood of science, technology, engineering and mathematics (STEM)-intensive green energy objectives. Instead, the board gender composition does not correlate with non-energy ‘green’ objectives. Non-energy ‘green’ firms emerge more in gender-equal regions, while social start-ups develop where women have fewer employment opportunities.

KEYWORDS:

• Innovative start-ups
• gender
• sustainable regional development
• social business
• sustainability

JEL:

• J16
• Q10
• M13
• O35

ACKNOWLEDGEMENTS

We are thankful to participants of the 2023 GREG workshop, the 2022 IEEE conference, the 2022 SIEPI conference, and the Mascik workshop for helpful comments and suggestions. We are grateful to Francesco Quatraro for providing regional data on the green patents. All usual disclaimers apply. Chiara Ravetti carried out this study within the Ministerial Decree no. 1062/2021 and received funding from the FSE REACT-EU - PON Ricerca e Innovazione 2014–2020. This manuscript reflects only the authors’ views and opinions, neither the European Union nor the European Commission can be considered responsible for them.

DATA AVAILABILITY STATEMENT

Part of the data employed in this paper are proprietary and the authors are not authorised to share them.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author(s).

Notes

1. Some authors view environmental goals in entrepreneurship as social goals, while others see them as separate (see e.g., the review in Gast et al., 2017). In the literature on gender and sustainable entrepreneurship, there are arguments supporting both views. Hence, we consider both types of goals in our empirical analysis.

2. Determining whether gender composition or sustainability vocation comes first in start-ups is complex given the unobservable pre-start-up phase. As start-ups evolve from initial ideas to operational businesses, the distinction between the business idea and the founding team becomes blurred (Brixy et al., 2020). Women may self-select into sustainable firms due to preferences, values and motivations, or they may drive the company toward a sustainable orientation once inside. All these mechanisms are compatible with existing literature, but we cannot distinguish them with our data. Therefore, we aim to explore conditional correlations between gender equality and sustainability rather than establish causality.

3. Decreto-legge of 18 October 2012 n. 179. Later laws integrated the initial decree: Decreto-legge of 28 June 2013 n. 76, Decreto-legge 24 January 2015 n.3, and Legge of 11 December 2016 n.232.

4. Earlier data was not available by Registro Imprese and we could not ensure that all start-ups registered in the latest available version. We stop in 2020 to avoid the drastic changes following the COVID-19 pandemic.

5. The crawler was designed in Python using a Beautiful Soup library: after parsing the HTML text from the start-up’s website, it extracted the keywords corresponding to the predefined list of sustainable keywords designed for the tagging of green companies. In summary, the crawler iterated through a list of sanitised URLs, downloaded corresponding HTML files, extracted visible text, matched keywords and finally recorded the results in JSON files.

6. All our results are robust to removing the dummies for ‘social’, ‘green’ and ‘energy’.

7. We control for the regions with the highest green and social prevalence of innovative start-ups (Lombardia, Lazio, Campania, Veneto, Emilia-Romagna, Piemonte, Liguria, Puglia, Trentino-Alto Adige) and conduct robustness checks with different numbers of dummies.

8. In the ATECO 2007 classification, these sectors are J62 (Software, IT consultancy and related activities), J63 (Information and other IT services), M72 (Scientific Research and Development), C28 (Manufacturing of machines and other equipment), M74 (Other professional, scientific, and technical activities). Each of them has at least 3% of companies from our sample registered in it, altogether making up almost 70% of all innovative start-ups.

9. We experimented with different sets of regional dummies, ranked by the number of green and social start-ups in each region, and a clear pattern emerged: regions with the highest numbers of start-ups are also comparatively gender-equal, hence including more regional dummies makes the significance of the relationship emerge more clearly. Results are available upon request.

10. These results are qualitatively insensitive to the specific set of regional dummies included.

Additional information

Funding

Chiara Ravetti carried out this study within the Ministerial Decree no. 1062/2021 and received funding from the FSE REACT-EU - PON Ricerca e Innovazione 2014–2020. This manuscript reflects only the authors’ views and opinions, neither the European Union nor the European Commission can be considered responsible for them.