This “unexplained” part subsumes the effects of group differences in unobserved predictors, such as the ability or other personal characteristics of female and male business owners. Enterprises are defined as women (men)-owned if one or more women (men) own more than 50% of the shares. As discussed in Chapter 24, the single most decisive factor in the gender productivity gap is the lower capital intensity of women-owned enterprises - it accounts for 38% of the gap. The lower average size of women-owned enterprises explains a large part of the gender differential in profits and in employment growth.