Scale the Gap: Exploring gender ownership and growth experiences for Canadian firms

Executive Summary

Does gender ownership structure matter for firm growth? This report explores differing experiences for Canadian entrepreneurs by examining how gender control of the firm impacts business growth and the likelihood a firm becomes a scale-up, a topic that is often overlooked in discourse and scholarship on high-growth firms. Using data from the Survey on Financing and Growth of Small and Medium Enterprises microdata linked to firm administrative data through Statistics Canada’s Linked File Environment, descriptive and econometric analyses explore the relationship between ownership structure and growth, taking into account barriers to firm growth and exporting and the growth impact of firm innovation and intellectual property holdings.

We find that, while gender control does not directly impact the probability that a firm reaches scale-up status, there are systematic differences in the impact that growth barriers and growth supports have on firms with different degrees of women ownership. Evidence shows that firms with higher share owned by women are less likely to reach scale-up status conditional on facing specific growth barriers, namely challenges regarding labour (shortages and recruitment and retainment), regulations, and consumer demand. We also find that firms with higher women ownership that innovate or hold intellectual property are less likely to reach scale-up status than those with men ownership, suggesting that these firms may have a more difficult time translating innovative inputs into growth. In other words, we find evidence that gender is a crucial mediating variable in a firm’s growth process. A detailed analysis shows that the channel through which gender ownership structure impacts growth is complex. The findings in this report will inform both public discourse and policymaking regarding scale-ups and initiatives that seek to encourage and support women entrepreneurship.