Abstract: 

Gender homophily remains a key driver of the underrepresentation of females as, e.g., board members or employees in male-led new ventures, leaving the question of how gender homophily might be dispelled largely under-studied. We use a large-sample inductive approach to explore the impact of family members’ potential vulnerability to gendered norms—a term we label “family vulnerability”—on male founders’ tendencies to hire women. Using the naturally random assignment of a child’s sex to a fathering male founder as an exogenous form of family vulnerability, we find that, conditional on the total number of children, fathering an additional daughter as opposed to a son is associated with a 20% (5%) increase in the probability of hiring a female director (employee), despite the prevalent homophily force. We explore and discuss various mechanisms that can explain the family vulnerability effect, and find gender-related reflexivity to be a key plausible mechanism. We discuss the theoretical implications of our inductive findings for the literatures on homophily, gender, and entrepreneurship, as well as managerial practice and policy.