Gender effects on risk-taking of entrepreneurs: evidence from Bulgaria

Purpose - The research objective of the study is to investigate the gender effects on risk propensity, risk perception, and risk behaviour of entrepreneurs distinguishing between direct and indirect gender effects. The study seeks to address the gap in the knowledge of the link between risk taking, risk propensity, and risk perception in the context of women and risk (Brindley). Design/methodology/approach - Based on Sitkin and Pablo's model of risk behaviour and the literature on cognitive factors as determinants of risk perception, the paper provides hypotheses about the link between gender, risk perception, risk propensity, and risk behaviour. The proposed hypotheses are tested on a sample of 382 Bulgarian entrepreneurs. Findings - Although female and male entrepreneurs have similar risk perceptions, female entrepreneurs are likely to have a lower risk propensity than male entrepreneurs. Risk propensity mediates completely the effect of gender on risk behaviour. The effect of gender on risk propensity is mediated partially by risk preference, outcome history, and age. Gender has an indirect effect on risk perception via overconfidence and risk propensity. Research limitations/implications - The paper's ability to draw causal inferences is limited by the cross-sectional nature of the study. The results may not be applicable to other countries and occupations. Practical implications - The findings help to clarify the reasons for gender differences in risk behaviour and risk propensity of entrepreneurs and to design behavioural interventions. Originality/value - This paper is an attempt to create a better understanding of the factors that account for gender differences in risk taking.