Finance, Gender, and Entrepreneurship: India's Informal Sector Firms

Arbeitspapier

How does informal economic activity respond to increased financial inclusion? Does it become more entrepreneurial? Does access to new financing options change the gender configuration of informal economic activity and, if so, in what ways and what directions? We take advantage of nationwide data collected in 2010/11 and 2015/16 by India's National Sample Survey Office on unorganized (informal) enterprises. This period was one of rapid expansion of banking availability aimed particularly at the unbanked, under-banked, and women. We find strong empirical evidence supporting the crucial role of financial access in promoting entrepreneurship among informal sector firms in India. Our results are robust to alternative specifications and alternative measures of financial constraints using an approach combining propensity score matching and difference-in-differences. However, we do not find conclusive evidence that increased financial inclusion leads to a higher likelihood of women becoming entrepreneurs than men in the informal sector.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 13854

Classification and Topics

• Classification: Wirtschaft ; Microeconomic Analyses of Economic Development ; Financial Institutions and Services: Government Policy and Regulation ; Entrepreneurship
• Subject: entrepreneurship ; financial constraints ; gender ; informal sector ; difference-in-differences ; India

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gang, Ira N. ; Natarajan, Rajesh Raj ; Sen, Kunal
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/227381
• Last update: 10.03.2025, 11:45 AM CET