Networking Increases the Probability of Women’s Start-Ups in EMDEs

Abstract

In emerging markets and developing economies (EMDEs), entrepreneurship and self-employment, particularly among women, play a pivotal role as a means of livelihood. Unfortunately, the share of women participating in these activities is significantly lower compared to men, which has a negative effect on both the development of these countries and gender equality. Usual programs that support women’s entrepreneurship are costly. We aim to explore the role of social networks for the entrepreneurial entry of women in EMDEs, as women can ‘help themselves’ through their development and activation. Our results, using GEM data for 53 low- and middle-income countries for the period 2011–2018, revealed that an entrepreneur on the women’s social network increases the probability of their entrepreneurial entry by 3.3 percentage points. Our results also suggest that social networks represent an important source of information that enhances the determination of women to take advantage of good business opportunities, increases the positive effect of self-assessed start-up skills on entrepreneurial entry, and raises awareness of business risks. Based on these results (confirmed by robustness and causality checks), we can recommend supporting networking between entrepreneurs and women by targeted policy measures.

Keywords:

• Women
• entrepreneurship
• start-up
• networking
• social capital
• developing countries

Subject Classification Codes:

• D91
• J16
• J21
• L25
• L26

Acknowledgments

We thank Simon Johnson for language proofreading. The article uses data from the Global Entrepreneurship Monitor (GEM). The data of the GEM Adult Population Survey that support the findings of this study are openly available at https://www.gemconsortium.org/data/sets?id=aps. Source code for data processing will be made available upon request.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 44 countries were classified as EMDEs (i.e. low- and middle-income countries) in all years of the period 2011–2018, 9 countries were classified as EMDEs only in some years of the period (only those years are considered in this article).

Additional information

Funding

This study was funded by the Czech Science Foundation (GAČR) under Grant No. [22-31909S].