Gender differences in peer review and the associated impact on innovation financing are well documented but less well understood. We study peer review in the National Aeronautics and Space Administration Small Business Innovation Research program, a public initiative seeking to increase women's access to innovation funds. We theorize that reviewers use status characteristics inappropriately as heuristics and create gender bias. Econometric analysis shows evidence of direct bias against female applicants, an effect linked to challenges for newcomers in demonstrating individual legitimacy rather than concerns about the organizational legitimacy of the associated firm. We also demonstrate a corrective redistribution to reverse this bias and create equity in the funding outcome. As these results negatively impact diversity in innovation, we propose policy recommendations to overcome this bias.
Peer review is an important mechanism to rank and select technical proposals for funding. We examine the role of gender in a government program conducting this process. Controlling for the proposal quality and other factors, we show that the gender of the proposer is linked to lower scores. This effect is associated with proposals from females who are new to the program, suggesting their challenges in demonstrating credibility as leaders of these projects, and exacerbated by the fact that women represent a disproportionately high share of newcomers. Subsequently, the program reverses this bias such that the funding outcomes do not show the same inequities. This has important implications for policies supporting gender diversity in innovation.
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