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  • 2017
  • Working Paper
  • HBS Working Paper Series

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

By: Paul A. Gompers and Sophie Q. Wang
  • Format:Print
  • | Language:English
  • | Pages:63 
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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.

Keywords

Diversity; Gender; Venture Capital; Performance Improvement; Capital Markets

Citation

Gompers, Paul A., and Sophie Q. Wang. "And the Children Shall Lead: Gender Diversity and Performance in Venture Capital." Harvard Business School Working Paper, No. 17-103, May 2017.
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About The Author

Paul A. Gompers

Finance
→More Publications

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