Gender and returns to entrepreneurship in Africa

Abstract

Purpose The purpose of this paper is to assess determinants of returns to male and female entrepreneurship in Ghana, Kenya and Uganda at selected quantiles along the distribution, as well as examine gender gaps in returns to entrepreneurship and factors contributing these gaps. Design/methodology/approach Employing a unique data set collected in the three countries on entrepreneurial motivations, constraints and performance, the authors apply unconditional quantile regression technique to assess the determinants of returns to entrepreneurship at various quantiles along the distribution. Additionally, the authors employ decomposition techniques to assess gender gaps in returns to entrepreneurship at various points along the distribution. The data contain extensive information on entrepreneur’s personal characteristics, including parental background and household composition and structure. Findings The study finds substantial differences in determinants of returns to male and female entrepreneurship along the distribution, with firm asset increasing returns to entrepreneurship. There is also the presence of gender gaps in returns to entrepreneurship at the lower-end of distribution, however, gaps disappear at the upper tail of the distribution, indicative of sticky floors in returns to entrepreneurship in Ghana, Kenya and Uganda. The authors also find gender bias against female entrepreneurship in the three countries, as unobserved characteristics largely responsible for the gender gaps in entrepreneurial returns. Originality/value This work has been undertaken by the authors and has not been carried out by any other person. The study will add to the existing literature on gender and returns to entrepreneurship.