Academic journal article International Advances in Economic Research

Incentives and Female Entrepreneurial Activity: Evidence from Panel Firm Level Data

Academic journal article International Advances in Economic Research

Incentives and Female Entrepreneurial Activity: Evidence from Panel Firm Level Data

Article excerpt

Abstract The goal of this paper is to investigate entrepreneurial activity and to analyze the incentives of female participation in the labor market. Female entrepreneurial activity is closely related to social and economic issues. They represent a driving force, active and effective members of economic, political, professional and managerial societies. On the other hand, they have families with serious maternal responsibilities and inelastic household obligations, roles which they are trying to balance effectively. To that reason, specific actions and carefully designed measures are essential in encouraging and promoting them to engage into entrepreneurial activity. To investigate the issue of entrepreneurial activity, personal characteristics and various motivation incentives are examined in order to determine the major factors that may influence female entrepreneurial spirit in Greece. Obtaining data from 1600 industrial firms located in the prefecture of Piraeus over the period 1999-2009, this study makes use of the panel methodology approach to provide evidence about the main determinants of female entrepreneurship. What is found is that a combination of pull and push motives and effective mentoring framework, in addition to a set of personal characteristics such as risk of failure, educational level, creativity, innovativeness, ambitiousness and marital status, seem important for the encouragement of women entrepreneurship in Greece to start up a new business. The implications seem very substantial for the formulation and implementation of effective support policies and measures for female entrepreneurs' vital start up and early stage period.

Keywords Female entrepreneurship * Entrepreneurial incentives * Industrial firms * Panel data * Greece

JEL M13 * C33


Female entrepreneurial activity is a dynamic, social and economic phenomenon in the U.S., Europe, and worldwide. Entrepreneurship is regarded as a critical factor for future economic growth and job creation in the new competitive environment. According to Thurik and Wennekers (2004), "in today's world small businesses, and particularly new ones, are seen more than ever as a vehicle for entrepreneurship, contributing not just to employment and social and political stability, but also to innovative and competitive power." Furthermore, relevant empirical studies also sustain entrepreneurship's valuable contribution to national economics either in economic growth or job creation and wealth generation (Audretsch and Thurik 2002; Caree et al. 2002; Macaulay 2003; Prowess Report 2005; Centre for Women's Business Research 2005).

A century ago, women experienced serious difficulties in relation to their human rights, their labor market participation, and exercising their civil rights in various cases. Nowadays, even though social and labor equality have gradually been realized, there are still important gender inequity issues; as a result, women should make advancements towards equal opportunities at economic and social levels (Loutfi 2001). In addition to social cohesion issues, initiatives and programs promoting female entrepreneurial spirit can be extremely fundamental for economic growth and job creation (Hisrich 1990; Orhan and Scott 2001).

In some countries, female entrepreneurs correspond to a rising proportion of small and medium sized companies, representing growing rates as far as turnover and number of employees. It is detected that women are starting new businesses at a faster rate than men and are growing their percentage in total business ownership in Spain, Brazil, and the U.S. Female business owners are capable of recognizing and exploiting new market niches and are approved as key players in the new turbulent external business environment. However, while female entrepreneurial spirit has impressively improved in some countries, it seems to be less developed and even constrained due to various impediments in other countries (Minniti et al. …

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