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Do Institutions Have a Greater Effect on Female Entrepreneurs?

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  • Estrin, Saul

    () (London School of Economics)

  • Mickiewicz, Tomasz

    () (Aston University)

Abstract

This paper compares the impact of institutions on individual decisions to become entrepreneurs in the form of new business start ups by males and females across 44 developed and developing economies between 1998 and 2004. We test four hypotheses; that women are less likely to undertake entrepreneurial activity in countries where the rule of law is weaker; where the state sector is larger; where the informal financial sector is weaker and where the formal financial sector is weaker. We use data from the Global Enterprise Monitor survey (GEM) which covers at least 2,000 individuals annually in each of up to 44 countries, merged with country-level data, from the WB WDI and Heritage Foundation. We start with a spectrum of institutional variables and by utilizing factor analysis prior to regression estimation models, we are able to obtain results that are more robust and address multicollinearity between the institutional measures. We find that women are less likely to undertake entrepreneurial activity in countries where the state sector is larger, and demonstrate that this result applies to both high aspiration and low aspiration entrepreneurship. We also find that women benefit more from the larger informal financial sector.

Suggested Citation

  • Estrin, Saul & Mickiewicz, Tomasz, 2009. "Do Institutions Have a Greater Effect on Female Entrepreneurs?," IZA Discussion Papers 4577, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4577
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    Citations

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    Cited by:

    1. Joanna Tyrowicz & Magdalena Smyk & Barbara Liberda, 2017. "Talent workers as entrepreneurs: a new approach to aspirational self-employment," Bank i Kredyt, Narodowy Bank Polski, vol. 48(6), pages 571-592.
    2. Elvin Afandi & Majid Kermani, 2014. "Bridging the Gender Gap in Entrepreneurship: Evidence from Europe," William Davidson Institute Working Papers Series wp1074, William Davidson Institute at the University of Michigan.
    3. Babbitt, Laura G. & Brown, Drusilla & Mazaheri, Nimah, 2015. "Gender, Entrepreneurship, and the Formal–Informal Dilemma: Evidence from Indonesia," World Development, Elsevier, vol. 72(C), pages 163-174.
    4. Werner Boente & Monika Jarosch, 2011. "Gender Differences in Competitiveness, Risk Tolerance, and other Personality Traits: Do they contribute to the Gender Gap in Entrepreneurship?," Schumpeter Discussion Papers sdp11012, Universitätsbibliothek Wuppertal, University Library.
    5. Ejaz Ghani & William R. Kerr & Stephen D. O'Connell, 2013. "Local industrial structures and female entrepreneurship in India," Journal of Economic Geography, Oxford University Press, vol. 13(6), pages 929-964, November.
    6. Tyrowicz, Joanna, 2011. "What distinguishes entrepreneurs? Evidence on the motives for self-employment," Economics Letters, Elsevier, vol. 112(3), pages 226-229, September.
    7. Gian Fazio & Tomasz Marek Mickiewicz, 2009. "Institutional environment, innovative entrepreneurial entry and venture capital financing," UCL SSEES Economics and Business working paper series 102, UCL School of Slavonic and East European Studies (SSEES).
    8. Werner Bönte & Monika Piegeler, 2013. "Gender gap in latent and nascent entrepreneurship: driven by competitiveness," Small Business Economics, Springer, vol. 41(4), pages 961-987, December.
    9. Ghani, Ejaz & Kerr, William R. & O'Connell, Stephen D., 2012. "What explains big gender disparities in India ? local industrial structures and female entrepreneurship," Policy Research Working Paper Series 6228, The World Bank.
    10. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.

    More about this item

    Keywords

    state sector; female entrepreneurship; informal finance;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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