The human development index predicts female entrepreneurship rates

Purpose – Past research has identified a negative association between national income and female entrepreneurship rates. Data from Global Entrepreneurship Monitor (GEM) 2012 are analyzed to determine whether the Human Development Index (HDI) predicts female entrepreneurship rates. The purpose of this paper is to indicate how other socioeconomic variables that measure human development interact with national income to predict female entrepreneurship rates.

Design/methodology/approach – Data were drawn from the 2012 GEM data set, which provides information on female entrepreneurship rates in 61 countries. To test relevant hypotheses, dependent and socio-demographic variables were sourced from international databases to perform quantitative cross-country regression analyses.

Findings – National income significantly predicted female entrepreneurship rates in the univariate analysis. However, this relationship became non-significant when development indices were added to the model. In contrast, the HDI, the Gender Inequality Index, and national religious composition were robust, significant predictors.

Practical implications – This study presents evidence that human and gender development indices, and national religious composition, are better predictors of female entrepreneurship rates than national income. Thus, studies on female entrepreneurship rates should account and adjust for human development and gender equality indices. As religiosity continues to be pervasive within multiple nations, policymakers should consider this when developing interventions geared toward promoting female entrepreneurship.

Originality/value – This paper identifies factors other than economic determinism to explain variance in female entrepreneurship rates and demonstrates that human development and gender inequality indices are better predictors of female entrepreneurship rates.