A new study released by Statistics Canada today measures business performance and examines its relationship to individual/family characteristics as well as labour and self-employment experiences before starting a business.  In Labour Market Experience, Gender Diversity and the Success of Women-Owned Enterprises Douwere Grekou uses the Canadian Employer-Employee Dynamics Database (CEEDD) to draw inferences about the relationships between performance of male and female owned businesses and experience/characteristics prior to starting the business.

Business performance in this study is measured by revenue and employment.  Business ownership is defined as ownership of a private incorporated business.  Entrants into business ownership refer to those who are present as owners of the business in the current year but not in the prior year.  Businesses are classified into whether they are majority male-owned or majority female-owned.  Previous studies on the differences between female and male owned enterprises focus access to capital, representation in key networks, management experience and technical education.  This study adds to the literature by examining individual/family characteristics as well as prior labour market experiences and their relationship to business performance by a new entrant.

The results of the study suggest that prior ownership of an unincorporated business as well as experience in the same industry are positively correlated with business performance measures.  This experience benefit is present in female-owned businesses as well as male-owned businesses.  However, prior experinece with owning an unincorporated business/self employment and employment within the industry are more prevalent among male business owners. 

The results also showed that having a diversity of women and men in ownership correlates to better performance - for both majority male-owned businsses and majority female-owned businesses.  Furthermore, having a spouse (whether involved with the business or not) was positively correlated with better revenue performance while having a spouse as a business partner was negatively correlated with business employment performance.  Having children has positive correlation with revenue performance, but no consistent correlation with employment measures.

Businesses that are their owners' primary focus perform better, as do businesses operated by older owners.  Immigrant business owners (especially recent immigrant business owners) experienced weaker business performance.

Source: Genkou, Douwere.  Labour Market Experience, Gender Diversity and the Success of Women-Owned Enterprises.  Statistics Canada.  Analytical Studies Branch Research Paper Series (11F0019M) 2020010.