Abstract
<title>Abstract</title> <p>Decomposition methods following Nix, Gamberoni and Heath (2016) applied to novel and rich survey data on gender performance gaps in businesses in Malawi show that constraints that differentially affect female entrepreneurs such as caregiving responsibilities and gendered workplace hostility contribute to observed differences in profits. In our multi-stage stratified random sample of urban and rural communities in the three major regions of Malawi, businesses owned by men earn profits 120 percent higher than those of female-owned businesses on average which is a common finding in studies of entrepreneurship and self-employment in Africa. Our data includes less common measures of gendered workplace hostility and more traditionally measured correlates of business success allowing for workplace hostility to be benchmarked against other potential drivers of business profits. We find that the primary drivers of average differences in business profits by gender include caregiving responsibilities in addition to access to capital, business age, differences in hours worked and geography. Average differences in experiences of gendered workplace hostility were significant but smaller than expected between men and women but exposure to gendered workplace hostility more strongly negatively affects the profits of female entrepreneurs – while positive entrepreneurial mindset measures such as grit and confidence increase the profits of men more strongly. Experiences of gendered workplace hostility were positively correlated for both men and women with some measures of economic and social privilege conditioning on community characteristics. These findings suggest that addressing the need for support for caregiving and increasing access to capital may be the most effective interventions to improve the performance of female-owned businesses but that addressing gendered workplace hostility may also benefit. JEL codes: D04, J16, O17</p>