Female Necessity And Opportunity Entrepreneurship: A Study Of Income Level And Social Progress

Abstract

The number of female owned enterprises is gradually increasing as more and more women are starting their own businesses. This has encouraged, governments, policy makers, and scholars to focus on unearthing different individual, social, and economic factors, which can promote female entrepreneurial activities. However, a majority of the studies concerning female entrepreneurial activities have focused on their overall level of business start-ups. These studies have failed to delineate between necessity based and opportunity driven entrepreneurship. Moreover, little empirical work is done to investigate how different economic, social, and cultural factors shape women’s entrepreneurial initiatives. This study aims to fill the gap in the extant literature by investigating the impact of economic development and social progress on necessity based and opportunity driven entrepreneurship among females. For this purpose, data regarding different types of female entrepreneurship was collected from the Global Entrepreneurship Monitor, while Gross National Income, the Social Progress Index, and the Human Capital Index were used as measures to capture economic and social factors. Regression Analysis using the Ordinary Least Square method was used for hypothesis testing. Results of this study indicate that GNI per capita, social progress and human development are positively related with opportunity driven female entrepreneurship, while the same predictors are negatively associated with necessity-based entrepreneurship among women. Moreover, GNI per capita, social progress and human development have a U-shaped relationship with overall female entrepreneurship implying that at the left side of the curve, necessity-based entrepreneurship is more prominent, while on the other side opportunity driven entrepreneurship dominates. This finding shows that distinguishing between different types of entrepreneurship can provide more nuanced explanations regarding effects of different social and economic initiatives to foster entrepreneurial activities among women.