How institutions and gender differences in education shape entrepreneurial activity: a cross-national perspective

Dilli, S., & Westerhuis, G. (2018). Small Business Economics, 1-22.

The article investigates the role of gender differences in science, technology, engineering, and math (STEM) education during different stages of entrepreneurial activity. 

SUMMARY

Previous research suggests that cross-national differences in entrepreneurship can be explained by differences in education, more particularly gender differences in science education in STEM fields. But empirical evidence on their role in stimulating entrepreneurship is scarce. The article examines the impact of these gender differences and argues that “closing the gender gap in science education at the country-level is beneficial for (female) entrepreneurial activity”.

Methodology

The authors use data from the Global Entrepreneurship Monitor for 19 European countries and the USA from 2002 to 2010, that they combine with macro-level data to “study the role of these differences in STEM education for three stages of the entrepreneurial process:  entrepreneurial awareness, the choice of sector for entrepreneurial activity, and entrepreneurial growth aspirations”. To model the gender differences during the three stages, they use multilevel probit regressions to analyze the data, with country-year effects to account for unobserved heterogeneity across countries. They also test whether the institutional environment influences the effects of gender differences in education, by adding the interaction effects of an individual entrepreneur and institutional variables. 

Findings

The findings show that individual factors such as network, and skills, including education, “explain the gender differences in being involved in entrepreneurial activity during all three stages of entrepreneurial activity”. “Female entrepreneurs are less involved in entrepreneurial networks, are less likely to start a business, and have less prior start-up experience”. Moreover, gender equality in science education is positively “correlated with entrepreneurial activity in knowledge-intensive sectors and high-growth aspirations”. “Closing the gender gap in science at the national level can benefit a country as a whole by stimulating innovative entrepreneurial activity”. In terms of policy perspective, targeting gender differences at the individual level (the skills that are necessary for entrepreneurial activity) is important. Alternative channels such as internships can create networking opportunities for women. 

Future research could use individual-level data to provide information on choices of study, and develop measures of education that reflect skills learned in different fields.