gaps in the literature that go beyond external constraints and endowments, and include internal constraints, preferences, and non-economic outcomes. Allison et al. (2023) provide data evidence that women-led firms tend to underperform compared to men-led firms around the world. Several policyoriented reports focus on policy recommendations and include useful reviews of the literature (Kevane et al. 2021; Koshy and Sanchez 2021; and Siegrist 2022). This paper contributes to this literature by reviewing a large set of recent RCTs with the purpose on analyzing what works to support grow-oriented womenled businesses.

# 2. Motivating facts and analytical framework

## 2.1 Motivating facts

A series of empirical studies documents that women-led firms face differential constraints and have lower levels of labor, total factor productivity, and profits than men-led firms (e.g., Aterido et al. 2011, Bardasi et al. 2011, Campos et al. 2019, Islam et al. 2020, World Bank 2021, Fang et al. 2022, Allison et al. 2023). Moreover, recent studies show that the COVID-19 pandemic has had a disproportionate negative impact on businesses led by women (Goldstein et al. 2020, Kugler et al. 2021, Liu et al. 2021, Torres et al. 2021). However, there is some emerging evidence indicating that gender gaps in profits or productivity are reduced or disappear for enterprises of larger size (World Bank 2021, Fang et al. 2022). This points to the importance of studying constraints restricting the growth of women-led firms, which can generate misallocation of resources and have major implications for economic growth and development (Chiplunkar and Goldberg 2023).

Such constraints are evidenced by the fact that the share of businesses led by women decreases as the size of the firm increases, as shown in Figure 1. According to calculations using data from World Bank Enterprise Surveys, women-led businesses constitute 22 percent of formal businesses globally.<sup>3</sup> However, the share of women-led firms diminishes from 24 percent among small firms to 19 percent among medium-sized firms, and further to 14 percent among large firms. This trend is observed worldwide, with a less marked pattern in the Middle East and North Africa and South Asia, where there overall share of formal women-led firms is smaller and legal constraints for women are more pronounced (World Bank 2023). The data for Figure 1 include only formal firms with at least five employees, since there is no equivalent cross-country dataset for informal or smaller firms. Nevertheless, the gender-based size 3 The definition of a “woman-led firm” varies in the literature. To construct Figure 1, the definition adopted includes firms that have either more than 50 percent female ownership or a female top manager. Alternative definitions yield a similar pattern by firm size across regions. In the sample used to prepare the graph, the share of firms with a female top manager (as defined by Islam et al. 2020) is 18 percent; the share with more than 50 percent female ownership is 15 percent, the share with both a female top manager and at least one female owner (as defined by Fang et al. 2022) is 14 percent; and the share with both a female top manager and at least 20 percent female ownership is 12 percent. Finally, the share with at least one female owner is 36 percent; only for this variable the pattern by size is not as clear. Fang et al. (2022) argue that the presence of a female manager better captures firms that are led by women than the presence of least one female owner. The shares reported above are consistent with data collected directly from business registers in eighty-one economies by the We-Data project (see Meunier et al. 2022), which shows that women represent 25 percent of new business owners in limited liability companies, 25 percent of new business directors, and 33 percent of new sole proprietors.

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