Determinants of female entrepreneurship in developing countries

Purpose – Several scholars have found important factors which might influence (female) entrepreneurship in developed countries. The aim of this thesis is to find out if these factors are also important for female entrepreneurship in India. Design/methodology/Approach – The research is performed based on the GEM dataset for India for the years 2006, 2007 and 2008. The analysis is performed using the Logit Model and the Multinomial Logit Model. Findings – The results show that having a network of entrepreneurs is positively related to necessity entrepreneurship among Indian females. Research limitations/implications – During the development of this research, several limitations came to the fore. The sample size is small, for example, and the data is cross-sectional and based on one developing country only, namely India. Second, the sample is based on the period 2006, 2007 and 2008: This is a period before the financial crisis. It might very well be that the number of entrepreneurs and factors related to self-employment have changed since the financial crisis. The sample is not divided in rural and urban regions. The relations between the determinants and self-employment might differ per region. Also, several independent variables are based on the perception of the respondents. For example, respondents were asked if they believe they have enough skills and knowledge to set-up a business. Respondents with similar skills and knowledge, however, might not be confident about his or her abilities. Therefore, respondents with similar skills and knowledge might answer this question differently. There is still room for further research on female entrepreneurship in developing countries. A suggestion is to include more developing countries in the sample and categorize them based on similar characteristics. Examples of categories are; according to continent and level of freedom. A suggestion could also be to divide the sample in rural and urban regions, since the relations between the determinants and self-employment might differ per region. A large longitudinal sample (after 2008) which includes other developing countries might show results that are more representative for developing countries. A longitudinal sample would provide us the possibility to find causality between the determinants and female entrepreneurship. Another suggestion would be to add other factors that might be relevant for female entrepreneurship in developing countries mainly because this might improve the understanding of female entrepreneurship in developing countries. Examples of such variables are (gender) discrimination, having a self-employed husband or parents, the role of the government, number of children etcetera. Value – This study provides information on determinants that influence Indian females to become an entrepreneur. This information can help policymakers develop methods and projects to encourage female entrepreneurship in developing countries.