# **1. Introduction**

Women’s economic empowerment is a cornerstone of the 2030 Agenda for Sustainable Development. The 2016 Report of the United Nations Secretary-General’s High-Level Panel on Women’s Economic Empowerment provides strong evidence that women are lagging behind men in terms of the number of female business owners, the size of women-owned businesses, and their access to economic resources. Specifically, women-owned enterprises are smaller and disadvantaged in their access to credit, resources, and assets (UN Secretary-General’s High-Level Panel on Women’s Economic Empowerment 2016, 2). With data on the existing gender gap in female entrepreneurship sparse, tracking the progress achieved by women in this area becomes more important.

Cross-country comparisons are essential for in-depth analysis of the development of female entrepreneurship in different institutional, legal and socio-cultural environments. Measuring women’s entrepreneurial activity is critically important for a better understanding of how female entrepreneurs contribute to the economy and society. However, there are few data sets related to female entrepreneurship with comparable cross-country data. To address this issue, the 2017 edition of the World Bank Group’s Entrepreneurship Database expanded its scope to collect comparable cross-country data on the number of new female and male LLC owners and sole proprietors.

The importance of female entrepreneurship for economic development is widely recognized. Numerous studies demonstrate the positive impact of female entrepreneurs on economic growth and development, as well as sustainable and durable peace (Cuberes and Teignier 2014; Fetsch, Jackson, and Wiens 2015; Lewis et al. 2014; Woetzel et al. 2015). Moreover, economies characterized by high levels of female entrepreneurial activity are more resilient to financial crises and experience economic slowdowns less frequently (Global Entrepreneurship Research Association 2017, 29). Despite different methodologies, these studies find significant socioeconomic benefits of female entrepreneurship. According to Woetzel et _— —_ al. (2015), a “full-potential” scenario in which women participate in the economy identically to men would contribute as much as $28 trillion, or 26 percent, to annual global GDP by 2025. Currently, the potential of female entrepreneurs is not fully realized in many economies. Indeed, an analysis of 15 gender indicators across 95 economies shows that 46 of these economies have very high levels of gender inequality on more than half of the indicators (ibid.). Another cross-country study demonstrates that gender gaprelated income losses differ by geographical region (Cuberes and Teignier 2014). Economies in the Middle East and North Africa have the highest income loss associated with lower economic opportunities for women (27 percent); in Europe, this loss is less than 10 percent (ibid., 21).

This study provides further evidence of gender gaps in female business entry and ownership in many economies worldwide. Indeed, less than one-third of LLC owners are women in the vast majority of economies. Although sole proprietorships are more frequently used by female entrepreneurs, only three economies have similar or equal numbers of women business owners relative to men. The study also suggests that the gap in female entrepreneurship is reinforced by other gender inequalities, such as low financial inclusion of women, the gap in education, and legal rights disparities.

Section 2 reviews the coverage and limitations of existing female entrepreneurship data sets. Section 3 presents the methodology and describes the data collection process, with a particular focus on the new gender-specific indicators. Section 4 consists of a comparative analysis of gender gaps in business entry and ownership across economies. Section 5 discusses how institutional factors can influence female entrepreneurship. Specifically, this section analyzes the link between the level of female entrepreneurship and other factors, including legal barriers for women to doing business, their level of education and their ability to access bank accounts and capital.

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