Investigating the relationship between women's entrepreneurship and country-level innovation: evidence from a panel of OECD countries

Abstract

PurposeIn recent years, the topic of women's entrepreneurship has gained increasing attention from researchers and policymakers. Its role in economic growth and development has been widely recognized in several studies. However, the relationship between gender in entrepreneurship and innovation is an underexplored aspect in particular at a country-level perspective. This paper aims to answer the following question: Does female entrepreneurship impact innovation at a national level?Design/methodology/approachUsing a panel dataset of 35 Organization for Economic Co-operation and Development (OECD) member countries over the period 2002–2019, the authors carried out a comprehensive econometric analysis, based on the fixed-effect model, the random-effect model and the feasible generalized least squares estimator, as well as a battery of tests to prevent problems of multicollinearity, heteroscedasticity and autocorrelation of the error terms. In doing so, the authors found consistent and robust results on the linear and nonlinear relationship between women's entrepreneurship and innovation, using selected country indicators from the Global Entrepreneurship Monitor (GEM) consortium, the Worldwide Governance Indicators (WGI) and the World Development Indicators (WDI), including female self-employment, female nascent entrepreneurship and R&D investment and controlling for the same relationships in the case of men's entrepreneurship.FindingsThis study shows that the level of R&D investment, which according to the literature can be considered as a proxy of innovation, is higher when the level of women's entrepreneurship is low. However, exploring more in depth this relationship and the relationship between male entrepreneurship and innovation, the authors found two important and new results. The first one involves the different impact on R&D investment of female self-employment and female nascent entrepreneurship. In particular, female self-employment appears to have a linear negative impact on the R&D, while the impact of female nascent entrepreneurship is statistically nonsignificant. The second one affects the nonlinearity of the negative effect, suggesting that very different challenges are possible at different levels of women's entrepreneurship. In addition, analyzing the role of human capital in the relationship between R&D investment and women entrepreneurship, it emerges that higher education (as the main component of human capital) makes early-stage women's entrepreneurship more technologically consuming, which promotes R&D investment. A higher level of education lessens the significance of the negative relationship between the simplest type of women entrepreneurship (female self-employment) and R&D investment.Originality/valueThe originality of the study is that it provides new evidence regarding the link between women's entrepreneurship and innovation at the macro level, with a specific focus on self-employed women entrepreneurs and early-stage women entrepreneurship. In this sense, to the best of the authors' knowledge, this study is among the few showing a nonlinear relationship between women's entrepreneurship and country-level innovation and a negative impact only in the case of female self-employment. Moreover, this study has relevant implications from a policymaking perspective, in terms of promoting more productive women's entrepreneurship.