The Effect of Gender on Women-led Small Enterprises: The Case of India

The importance of women-led enterprises for any country’s economic growth and competitiveness is well established. According to a 2009 study, in India female-run enterprises in recent years have performed significantly better than other enterprises in terms of productivity and export percentages. However, gender gap in entrepreneurial initiatives in India is among the highest in the world. Although accepted as crucial, the role of public policy towards addressing these barriers is under-researched in the entrepreneurship literature. Further, the current evidence base on state-level predictors of female enterprises is scant. The aim of this study is to highlight these gaps. In doing so, the focus is on interpreting the role of gender correlates—fertility, female educational attainment and female economic activities—in facilitating or hindering women-led enterprises. Indeed, previous studies have identified gender-related factors to have the greatest impact on women’s choice in not taking up entrepreneurial activities. An empirical regression analysis and a qualitative review of the institutional environment are conducted. The findings presented in this study indicate the need for a realignment of policy focus towards addressing gender barriers and developing managerial skills, in addition to technical skills, of women entrepreneurs.