# 1. Introduction

Entrepreneurship can foster innovation, productivity growth, and employment (Schumpeter 1934, Acemoglu and Robinson 2012). According to the Global Entrepreneurship Monitor Survey, over half of the women in developing countries are, or aspire to be, entrepreneurs (Elam et al. 2021). However, most lead subsistence-oriented micro-businesses, which are not seen as key drivers of innovation and growth (La Porta and Schleifer 2014).<sup>2</sup> The narrative among policy makers regarding women’s entrepreneurship is gradually shifting from encouraging the creation of a high number of startups to focusing on supporting women who are well positioned to lead growth-oriented enterprises (Elam et al. 2021). While innovative women entrepreneurs have the potential to be agents of change and offer novel solutions to global challenges, they encounter a range of unique constraints that can limit the expansion of their businesses.

This paper reviews evidence on interventions designed to support women-led businesses by addressing their differential constraints and aiding them in making decisions that foster business growth. The focus is on women who lead growth-oriented micro, small, and medium enterprises (MSMEs) with aspirations to scale up their operations, although some interventions may also benefit women managing subsistence enterprises. The paper does not discuss issues covered by other reviews related to differential selection into entrepreneurship between women and men or the role of non-economic outcomes such as work-life balance and community service desires (Campos et al. 2019, Love et al. 2023). It also does not address policies for large, limited liability companies, where the evidence remains scarce.

The review uses a simple analytical framework by which women entrepreneurs face differential constraints that affect their strategic business decisions such as how much to invest in production factors and what sector or market to enter, which in turn determine their business outcomes. Such constraints can also affect returns to their investments, thus directly impacting outcomes. Interventions are organized into four categories of constraints: 1) Human capital, encompassing gender gaps in access to skills and networks; 2) Factors limiting access to finance, 3) Factors inhibiting technology adoption and market expansion; and 4) Contextual factors, such as legal and regulatory barriers, social norms, access to care, and gender-based violence.

The contribution of this paper is to provide an updated narrative review summarizing how various interventions can alleviate constraints and enhance outcomes for women-led businesses. It focuses on a substantial body of high-quality randomized controlled trials (RCTs) primarily conducted with micro and small enterprises in low- or middle-income countries. Where RCTs are unavailable, the review acknowledges this and explores findings from studies using alternative identification strategies and operational insights to identify promising policy solutions.

This paper draws on previous literature reviewing interventions to support women-led businesses. Jayachandran (2021) explores differences in patterns for male and female-run microenterprises. Campos et al. 2019 focus on evidence in Africa, and World Bank (2021) on Southeast Asia. Love et al. (2023) identify

> 2 According to the Global Entrepreneurship Monitor data, the share of women-owned businesses with five or fewer employees was 91 percent in 2020, while that of men-owned businesses was 80 percent (Elam et al. 2021).

2