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Home-bias among Female Entrepreneurs: Experimental Evidence on Preferences from Pakistan Presenter: Farah Said Co-authors: Mahreen Mahmud, Giovanna d’Adda, Azam Chaudhry Abstract

We use data over two years from an individual level Randomised Control Trial with 630 aspiring female entrepreneurs in Punjab, Pakistan to evaluate the impact of a start-up loan for enterprises run by women. We find that the treatment increases the likelihood of setting up an enterprise, but only in the short run. We explore a novel explanation for this finding. Incentivised experiments reveal that both men and women are in support of the woman setting up a business, but the predominant preference is to operate the business from within the home. This ‘home-bias’ extends to the sources of advice preferred by women, who refrain from asking for advice from strangers even when it may increase their earnings. Such ‘home-bias’ in preferences can limit the potential to expand the business. Microcredit is unable to influence this homebias, challenging popular development practice aimed at encouraging female-run microenterprise through access to finance. Taken together, results indicate that internalized gender norms may explain the small size and short life of many businesses operated by women.

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Home-bias among Female Entrepreneurs: Experimental Evidence on Preferences from Pakistan  

Home-bias among Female Entrepreneurs: Experimental Evidence on Preferences from Pakistan