In both developed and developing countries, enterprises owned by women are smaller, exhibit lower growth, and are less resilient to shocks than those of men. Identifying the constraints faced by female entrepreneurs is vital for fostering economic growth. Recent studies have shown that interfirm relationships and access to professional networks can be important determinants of business success. However, the literature on female entrepreneurs in the development context has focused primarily on microenterprises and there is limited evidence on the importance of professional networks for female entrepreneurs of larger and, potentially, high-growth firms. Female entrepreneurs of larger firms may be less connected than their male counterparts to these networks due to frictions such as social norms and lack of knowledge. This project will conduct a field experiment in Ghana to investigate the effect of an exogenous expansion of female professional networks on firm performance, ability to cope with economic consequences of the pandemic, ambitions, and well-being of female entrepreneurs.
Data collection will focus on a sample of successful female entrepreneurs who run promising small- and medium-sized enterprises and who applied for a COVID-19 Stimulus Fund between June and August 2020. Building on work by Cai and Szeidl (2018), half of applicants will be randomly assigned to experimental business networking groups with biweekly virtual meetings. Truffa and Wong will investigate whether having a more diverse network in terms of years of experience can be more beneficial by bringing to the discussion more diverse perspectives. Because female entrepreneurs are facing unprecedented challenges related to work and family during the pandemic, the researchers will introduce two additional (orthogonal) support treatments: (i) a mental health support treatment in which we provide access to webinar events and one-on-one professional counselling with the goals of building self-confidence and coping with stressful experiences, and (ii) a business and legal training support treatment through access to webinars and a business management mobile app. In a subsample of female entrepreneurs with the highest potential for growth, we will also provide financial support.
This project will provide new evidence on several constraints facing potentially high-impact female entrepreneurs and identify new policies that can support the growth of their businesses. Firstly, this research will provide novel evidence on whether networking constraints are a major factor for gender inequality in entrepreneurship and business outcomes. Secondly, it will provide novel evidence on whether limited access to mental health support is an important constraint to growth for entrepreneurs in the developing context and whether access to a peer support network can help alleviate this barrier. Thirdly, the project will consider a new business training intervention that combines webinars and a digital platform that can enable entrepreneurs to implement new business practices more easily. Lastly, the study investigates the impact of providing business grants to female business owners during a large macroeconomic shock and how this support interacts with access to a professional network group.
