Female entrepreneurship in developing countries.

Author:Minniti, Maria
Position:Report
 
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In recent years, the rate of new business formation by women has significantly outpaced the rate of new business formation by men across all ethnic groups in the USA. Similar trends are found across the developing world. However, women still own and manage significantly fewer businesses than men. The explanation for this phenomenon, the behaviour of female entrepreneurs in terms of traits, motivations, and success rates, and their gender-related distinctiveness are complex and multifaceted. Despite a growing literature we still need more research on female entrepreneurship-particularly in developing countries where we are seeing a growing number of initiatives aimed at promoting entrepreneurship and empowering women in the process. The latter tendency reflects a generally growing interest in female entrepreneurship in developing countries, which, in turn, is due to greater interest in the role played by entrepreneurship in the economic development process. Women have been assigned a special role not only because they stand to benefit from entrepreneurship being the poorer and more discriminated against gender, but also because they are seen as a critical driver of entrepreneurship in light of their unique role in the household and the rise in female-headed households across the developing world.

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Some stylized facts from three decades of research on female entrepreneurship in advanced economies

What are the stylized facts we have learned from the last 30 years of research on female self-employment and new business creation? We now know that significantly fewer women than men own and manage businesses worldwide. This could be because women fail more often than men or because fewer women than men start businesses to begin with, or both. However, some evidence exists that, after correcting for factors such as size of the business and sectoral distribution, women's failure rates are not that significantly different from those of men. Thus, at least a portion of the difference between genders must be due to the fact that fewer women than men start businesses. Evidence to date suggests that a variety of reasons contribute to explaining observed differences in entrepreneurial behaviour across genders, and that such differences have significant implications at the macroeconomic level. Perhaps women and men have different socioeconomic characteristics and, if we were to correct for factors such as education, wealth, family and...

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