Growing together: Trust, spontaneous clusters, and the growth of micro, small, and medium enterprises in cities
Women, entrepreneurship, and institutions
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- This project aims to investigate whether improving enforcement of rule of law benefits female entrepreneurs more than male entrepreneurs, thus serving to reduce the gender gap in entrepreneurship.
- The project builds upon previous work that collected data on the distribution of all businesses across Lusaka. This brief presents new analysis of this data which reveals that being close to important legal or quasi-legal institutions is associated with a reduced or eliminated gender gap.
- In addition to this analysis, this brief presents evidence from an experiment with entrepreneurs in Lusaka that replicated the opportunity for pairs of entrepreneurs to cooperate on a business idea either with or without legal institutions.
- The experiment’s results show women trust their partner less in general compared to men, but introducing legal institutions reduces or eliminates this difference. This increased trust benefits both parties, so men do not lose out.
- Overall, this brief highlights that enforcing rule of law –even in a gender-blind way – appears to benefit female more than male entrepreneurs. This presents a new perspective on policies to address the gender gap in entrepreneurship. However, more research is needed on specific institutions.