Drivers of gender differentiated self‐employment in developing countries: The instances of finance and information and communication technology

Abstract

Abstract This study unveils new insights into how financial inclusion and information and communication technology (ICT) influence self‐employment (aggregate and gender‐specific) in developing countries. The dearth of information in this perspective, particularly in the context of Africa, compels this fresh evaluation. Thus, on account of the annual panel series for 52 African countries from 2005 to 2019, the system‐generalized method‐of‐moments (sysGMM) and the novel method‐of‐moments quantile regression (MM‐QR), the following empirical narratives emerged. First, the estimates of both procedures demonstrate that self‐employment in Africa is self‐exacerbating. Second, the sysGMM demonstrates that financial inclusions could not influence self‐employment substantially; however, the estimates of the MM‐QR demonstrate varying significant positive relationships mostly at the upper quantiles for all categories of self‐employment. Third, the sysGMM reveals that ICT produced marginal positive effects on all categories except women's self‐employment. Fourth, the MM‐QR rectified a significant positive influence of ICT at the lower and middle quantiles for the aggregate, only at the lower quantiles (q10–q25) for men, and at the upper quantiles (q75–q90) for women. Lastly, it was revealed that although unemployment, GDP and inflation rates are not sufficient drivers of self‐employment, energy poverty constitutes a drag for self‐employment in the continent. Overall, the study is of immense relevance to policymakers, practicing and prospective entrepreneurs particularly in developing countries. More policy options have been provided within the study.