Can female entrepreneurs boost social mobility in developing countries? An institutional analysis

Abstract

Entrepreneurship has been linked to economic development at the regional and national levels, yet the microeconomic nuances of entrepreneurial diversity and the challenges that different entrepreneurs face in producing social benefits remain unexplored. Numerous studies have recognised that a gender gap exists not only in entrepreneurship but also in development outcomes, such as firm performance and poverty alleviation. Few, though, have considered the role of institutions in incentivising women and men in the generational improvement process, such as social mobility. Hence, does the institutional environment framing gender differences constrain or enable potential effects of female (compared with male) entrepreneurs on microeconomic outcomes such as social mobility? We investigate the institutional influence on the probability of becoming a female entrepreneur and the effect of this decision on social mobility in developing countries. We test gender comparisons through two-stage probit least squares (2SPLS), showing that post-materialism, autonomy, network membership, democracy, and respect for human rights have positive effects on both women's and men's self-employment jointly as well as female self-employment specifically. We also show that the decision to become an entrepreneur has a greater influence on social mobility for female than for male entrepreneurs. Policy implications regarding gender equality are discussed.