A recent study by the Alberta School of Business challenges the idea that women lack confidence in starting businesses. The research found that women are just as sure of their entrepreneurial abilities as men. Interestingly, men tend to be a bit too confident, which can lead them into riskier ventures without seeking ways to improve.

The study also showed that women are up to 20% less involved in entrepreneurship than men. This raises questions about the common belief that women’s supposed lack of confidence holds them back.

This matters because policies often aim to boost women’s confidence in business. But if this belief isn’t entirely true, these policies might miss the mark. It’s important to understand the real reasons behind the gender gap in entrepreneurship.

“Accordingly, women are often counseled to correct this ‘problem’ by taking steps to strengthen their entrepreneurial self-efficacy, whereas men are assumed to ‘naturally’ possess the appropriate amount,” the researchers explain.

No lack of confidence

In two different studies, men and women were asked to do tasks related to starting businesses. Afterward, they rated how well they did without knowing their actual scores.

The first study found that around 70% of women’s self-assessment matched their actual scores. Only a small number, about six percent, felt less confident than they actually performed, while 24% felt more confident than they did.

For men, roughly 64% accurately judged their performance. About 8% felt they did worse than they actually did, and 28% felt they did better.

The researchers also checked if being overly confident helps in entrepreneurship. Turns out, those who thought they did better than they actually did, whether men or women, were less likely to do things that could really help their business, like checking how they did to improve.

“In the second study, we gave the participants several scenarios related to owning a business, and those who were overconfident—once again, men and women alike—were more likely to introduce a really risky, highly innovative product with a slim chance of success,” the researchers conclude.

“They were also significantly more likely to escalate commitment, or continue to dump money into a failing product.”