Closing the Doors : Sexual Harassment and the Survival Rates of Women-owned Firms

This paper examines sexual harassment and economic outcomes in entrepreneurship. Using a unique panel dataset of 790 women-owned firms in Ethiopia tracked over five years, the paper relates sexual harassment experienced by business owners to firm performance. First, it documents the prevalence of sexual harassment among women business owners. Over 16 percent of the women in the sample reported having been harassed in the prior 12 months, including incidences of sexual proposals and inappropriate physical contact. The paper shows that sexual harassment varies by business sector, as well as individual and firm characteristics. The findings suggest that experiencing sexual harassment is negatively associated with the economic returns of women business owners over time. Women entrepreneurs who report having experienced sexual harassment are 37 percent more likely to close their businesses five years later, despite initially earning higher business profits. Firm closure is associated with lower subsequent earnings, suggesting that exit is not driven by better employment opportunities. The findings suggest that gender-based safety constraints may distort firm dynamics and women’s economic achievement.