Female Entrepreneurship in China: Opportunity- or Necessity-Based?

The paper investigates the inequalities within entrepreneurship which are hindering Chinese socio-economic development. We take an institutionalist and gender-based approach. We establish the relationship between entrepreneurship and economic development and create a historical framework from which we examine contemporary female entrepreneurship. We find that females in China often engage in entrepreneurship in the informal sector, where average income is lower. Females are more likely than men to engage in necessity-based entrepreneurship rather than opportunity-based entrepreneurship in China. Therefore, the overall increase in female entrepreneurship in China in recent years does not necessarily imply improvement in living standards for those women. The paper demonstrates that different classes of entrepreneurs face different barriers, and that females need targeted assistance so that the gender gap in entrepreneurship can be reduced. Government should take responsibility for deconstructing social and cultural barriers to women through policy initiatives, as well as promoting women’s entrepreneurial training and capital formation. There is also a key role for the nongovernmental sector and international organizations to play in educating government, businesses, and workers, as well as pressuring and/or coordinating them where needed.