Gender inequality and the entrepreneurial gender gap: Evidence from 97 countries (2006-2017)

Although it seems almost a stylized fact that females are less likely than males to start new ventures, closing this gender gap is essential to foster sustainable economic growth. In this study, we analyze whether gender inequality, as measured at the country level by the World Economic Forum since 2006, is associated with the gender gap in entrepreneurship. By analyzing country-level information about gender inequality (97 countries) in combination with individual-level data from the Global Entrepreneurship Monitor (1,905,665 individuals) from the years 2006 to 2017, we find that in more gender equal countries involvement in total early-stage entrepreneurial activity (TEA) is higher. Gender inequality moderates the effect of gender on TEA, by almost closing the gender gap in entrepreneurship in the most gender equal countries. We show that gender inequalities in economic participation and opportunity as well as in political empowerment are the main drivers of this interaction effect. We find similar patterns when distinguishing between opportunity-driven and necessity-driven TEA. With opportunity-driven entrepreneurship as a potential vehicle for the economic empowerment of females, our study highlights the role of policies stimulating gender equality.