On the Relationship between Economic Dynamics and Female Entrepreneurship: Reflections for the Visegrad Countries

Abstract

The gender gap in entrepreneurship has been observed for a long time, explained by both female-specific and gender-neutral factors, but none of these explanations is generally accepted. The aim of the paper is to assess the effect of internal economic dynamics on female entrepreneurship. Economic dynamics is a persistent process affected simultaneously by both endogenous and exogenous factors of a different time horizon, with the development trend and the business cycle as the most important time perspectives. The decomposition procedure of time series is implemented to extract trend and cyclical fluctuations, after which the Vector Error Correction Model (VECM) method is used to estimate models showing the impact of economic dynamics on female entrepreneurship in the long- and medium-run. The study concerns the countries of the Visegrad Group, including Czechia, Hungary, Poland, and Slovakia, and is based on quarterly data from the years 1998 to 2020. The results show that, although the economic dynamics impact female entrepreneurship, to some extent, it is not the most dominant factor. The impact of economic dynamics on female entrepreneurship is much stronger in the trend perspective than in the business cycle perspective. The nature of the effect of economic dynamics on female entrepreneurship is also country-specific.