Women’s Business Ownership: Operating Within the Context of Institutional and In-Group Collectivism

The development of women’s entrepreneurship has positive implications for societal and economic growth. In this study, we examine the effects of culture and, more specifically, collectivism on women’s businesses. With a mixed-method and multilevel approach, we conducted a quantitative country-level analysis followed by a qualitative study of women entrepreneurs. Our results indicate that collectivism at the in-group level (family and close friends and colleagues) is a particularly important predictor of women’s business ownership. Furthermore, it is a balance of both collectivism and individualism at the in-group level that is most conducive to women’s business ownership. Institutional collectivism (at the societal level) acts as a background condition that influences the way in which in-group collectivism directly affects women’s business ownership. More specifically, when engaging in business development, women are primarily influenced by their in-groups. The freedom to pursue individual goals, combined with support from the in-group, provides the most beneficial environment for women to develop businesses, especially in societal-level cultures at the extreme ends of the collectivism spectrum—highly collectivistic or highly individualistic. A better understanding of these cultural factors should help with designing better business development training programs for women entrepreneurs and properly advising policy makers.