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Angel Investors’ Political Ideology and Investments in Women-Owned Ventures

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Abstract

To understand the ethical issue of gender inequality in entrepreneurial financing, we examine the effect of angel investors’ political ideology, the conservatism–liberalism continuum, on their investments in women-owned ventures. We propose that more conservative angel investors tend to have a lower percentage of investments in women-owned ventures in their portfolios. Moreover, drawing on the gender role congruity theory, we show that when investing in women-owned ventures, more conservative angels favor women-owned ventures with a higher percentage of male co-founders and operating in women-dominated industries. Our analysis, based on a longitudinal sample of 172 angels from 2010 to 2019, supports these hypotheses. Our study contributes to the literature by highlighting angel political ideology as a critical antecedent of the gender disparity in entrepreneurial financing.

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Notes

  1. The meanings of the terms “conservative” and “liberal” vary across nations and cultures (Malka et al., 2014). When we refer to “conservative,” it should be interpreted as the right-wing ideology that values order, tradition, and conformity. When we refer to “liberal,” we mean the left-wing ideology that emphasizes diversity, change, and equality.

  2. We have 1,325 angel–year observations because we excluded observations in which angel investors did not make any investments.

  3. Because not all angels’ personal wealth is publicly available, we used a mean-replacement to account for the value of personal wealth of angels with missing data.

  4. Because we were able to obtain the narratives of only 93 angels, we employed a mean-replacement strategy for the missing data.

  5. We use the natural-log transformation.

  6. Detailed results are available upon request.

  7. We would like to thank one of our reviewers for this suggestion.

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Acknowledgments

We thank Julia Roloff (the Section Editor) and three anonymous reviewers for helpful comments.

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Authors and Affiliations

  1. University of New Hampshire, 105 Main St, Durham, NH, 03824, USA

    Jianhong Chen & Jeffrey E. Sohl

  2. National Yunlin University of Science and Technology, 123 University Road, Section 3, Douliou, 64002, Yunlin, Taiwan, ROC

    Wan-Chien Lien

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  1. Jianhong Chen
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Chen, J., Sohl, J.E. & Lien, WC. Angel Investors’ Political Ideology and Investments in Women-Owned Ventures. J Bus Ethics 188, 379–396 (2023). https://doi.org/10.1007/s10551-022-05302-y

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