Female Entrepreneurship and Economic Activity

Abstract

Several studies and aid programs claim the contribution to welfare resulting from female entrepreneurship to be higher than that resulting from the activity of men. Unfortunately, however, the number of women entrepreneurs is significantly lower than that of men. Although quite a bit of attention has been paid to the existence of gender differences in entrepreneurial behavior, the causes of such differences are significantly less understood. No general agreement exists on whether they result from contextual or evolutionary causes and, in particular, no consensus exists on whether such differences are, at least to some extent, linked to the per-capita GDP of a country. Using a large set of data covering individuals from 34 nations, this article makes an initial attempt to address these questions. Although exploratory, the results suggest that per-capita GDP levels are significantly associated with the gender gap in entrepreneurial behavior but that subjective perceptions also play an important role. In contrast, individual demographic and economic conditions are found to be of relatively little importance.

Un certain nombre d’études et de programmes d’assistance affirment que la contribution de l’entreprenariat féminin au bien-être social est plus importante que la contribution résultant des activités des hommes. Cependant, le nombre de femmes entrepreneurs est malheureusement sensiblement moins élevé que celui des hommes. Une attention relativement soutenue est consacrée à l’existence de différences entre les hommes et les femmes dans leur comportement entrepreneurial, mais les causes de telles différences sont nettement moins bien comprises. Il n’existe aucun consensus sur les causes, contextuelles ou évolutives, de ces différences; Plus spécifiquement, il n’y a pas de consensus pour dire que de telles différences sont, au moins en partie, liées au PIB par habitant des pays. En se basant sur une grande base de données concernant les individus de 34 pays, cet article fait une première tentative d’exploration de ces questions. Bien qu’exploratoires, les résultats suggèrent que les niveaux de PIB par habitant ont un rapport significatif avec les différences entre les hommes et les femmes dans leurs comportements entrepreneuriaux, mais que les perceptions individuelles jouent également un rôle important. Par contraste, on constate que les conditions individuelles démographiques et économiques ont une influence relativement peu importante.

Appendix

Data Description

Started in 1999 with 10 participating countries, the Global Entrepreneurship Monitor (GEM) project has expanded to include 34 countries in 2004. GEM is an ongoing research project aimed at collecting data describing various aspects of the entrepreneurial processes within a wide range of countries. Data are collected via phone or face-to-face surveys of the adult populations using highly standardized questionnaires in each participating country.

Included in the survey are:

• Those older than the normal school leaving age

• All geographic regions of the country

• Those considered in and out of the labor force (housewives, retirees, students were included)

All respondents are asked three basic questions:

1a. Are you, alone or with others, currently trying to start a new business, including any type of self-employment? (yes, no, don’t know, refuse)

1b. Are you, alone or with others, trying to start a new business or a new venture with your employer – an effort that is part of your normal work? (yes, no, don’t know, refuse)

1c. Are you, alone or with others, the owner of a company you help manage? (yes, no, don’t know, refuse)

Respondents who answer ‘yes’ to items 1a or 1b, are then asked:

2a. You mentioned that you are trying to start a new business. Over the past 12 months have you done anything to help start this new business, such as looking for equipment or a location, organizing a start-up team, working on a business plan, beginning to save money or any other activity that would help launch a business? (yes, no, don’t know, refuse)

2b. Will you personally own all, part or none of this business? (all, part, none, don’t know, refuse)

2c. Has the new business paid any salaries, wages or payments in kind, including your own, for more than 3 months? (yes, no, don’t know, refused)

Respondents are coded as ‘nascent entrepreneur’ if, in addition to 1a and 1b, they answer ‘yes’ to 2a and 2b, and ‘no’ to 2c.

In addition, respondents who answer ‘yes’ to question 1c are asked:

3a. You said you were the owner or manager of a company. Do you personally own all, part or none of this business? (all, part, none, don’t know, refuse)

3c. What was the first year the owners received wages, profits or payments in kind? (four-digit year, or no profits yet, don’t know, refuse)

Respondents who classify as full or part owners of the business and have received wages or salaries paid up to 42 months are coded as ‘new business owners.’

For each country, the sum of nascent entrepreneurs and new business owners yields an estimate of total early-stage entrepreneurial activity. The variable is calculated by adding up nascent entrepreneurs and new business owners. Individuals who qualify as both are counted only once.

All independent variables used in the analysis are described in Table A1. All items are part of the GEM adult population survey questionnaire and are asked to all respondents, independently regardless of whether they are involved in entrepreneurial activities. This allows for the creation of samples that are representative of the entire population and access to a large control group.

Table a1 Variables’ definitions – GEM 2004