Factors influencing womenbusiness development

in the developing countriesEvidence from Bangladesh

Amzad HossainFinance and Banking Department,

Al Ain University of Science and Technology,Al Ain, United Arab Emirates

Kamal Naser and Asif ZamanCollege of Business Administration,

Al Ain University of Science and Technology,Al Ain, United Arab Emirates, and

Rana NuseibehNational Health Service, Cardiff, UK

Abstract

Purpose – The purpose of this paper is to examine factors that influence women entrepreneurshipdevelopment in Bangladesh.

Design/methodology/approach – The paper adopts quantitative and qualitative analyses ofpossible factors that may affect the development of women entrepreneurships such as: age, education,socio-culture, motivation, market information, business idea, enterprise creation, advocacy anddecision making, enabling environment, and financing. A questionnaire was used to provide empiricalevidence on the variables and to estimate the model employed by the study.

Findings – The analyses revealed that women face problems in establishing their own businesses inevery step that they take. The desire for financial independence and decision making, market andinformational network, availability of a start-up capital, knowledge and skills, and responsibilitytowards children are the main factors that impact women’s decision to become self-entrepreneurs.The regression analysis, however, revealed that participation in women associations, advocacy, anddecision making (self-fulfillment) and knowledge are the main factors that affect women’s decision todevelop their business. Yet, the results indicated that religion does not influence women’sentrepreneurship development.

Research limitations/implications – The questionnaire survey employed in this paper isconfined only to a women population who passed grade five and above as semi-educated or educatedwomen respondents group. The paper excludes homeless women or those who live in the slum urban areas.

Practical implications – The outcome of this paper can be used by researchers, government,non-governmental organizations, civil society, and local community to formulate effective policy thatmotivate women to become entrepreneurs. This will have a positive effect on women participation onthe economic development of Bangladesh.

Originality/value – This paper will be the first to provide empirical evidence on factors that affectwomen’s entrepreneurship development in the urban Bangladesh.

Keywords Entrepreneurs, Women, Business development, Bangladesh

Paper type Research paper

The current issue and full text archive of this journal is available at

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International Journal ofOrganizational AnalysisVol. 17 No. 3, 2009pp. 202-224q Emerald Group Publishing Limited1934-8835DOI 10.1108/19348830910974923

IntroductionBangladesh is experiencing a vicious circle of poverty with high-unemployment rates.Bangladesh, like other developing countries, has been working with the help ofnational and international donor partners and international agencies to implement thereforms needed for achieving its development goals. As part of such reforms, women’ssmall-scale economic activities have been under consideration at all stages of thecountry’s development plans.

The importance of micro and small enterprises in social and economic development,and the need to support their viability, expansion and growth, is accepted in mostcountries irrespective of their stage of economic development (International LaborOrganization – ILO, 2007). The success of micro-credit of the Grameen Bank inBangladesh attracts policy makers’ attention in considering women enterprisedevelopment. However, a large number of women’s enterprises are operating on aninformal basis and they are not included in the country’s economy. These enterpriseslack basic forms and information, marketing opportunities, regulatory and socialsupports (Asian Development Bank – ADB, 2001). In addition, they are evensurrounded by socio-cultural barriers of their own community and society aswhole. Such socio-cultural barriers hold back women’s economic contributions thatmake it often invisible and unrecognized in Bangladesh.

Almost half of the Bangladeshi population is women and they provide new laborforce entrants every day to the country’s economy (CIA, 2008). The country’s presentproduction and investment structure are unable to create new job opportunities to meetits demand. Thus, creating new employment opportunities for new women labor forceentrants, through supporting women’s self-enterprise development, can be an option toinvolve women in the country’s economic development.

Women’s innovative capabilities and ideas are compatible with men to succeed asentrepreneurs (Nilufer, 2001). As a result, women and men are equally likely to start abusiness (Aldrich et al., 2000). However, women suffer from two distinctdisadvantages:

(1) the initial lack of confidence in their own abilities; and

(2) society’s lack of confidence in women’s ability.

Generally in developing countries, women are brought-up under an adverseconservative socio-cultural environment that results in lack of confidence in themand the society in which they have been living. This reality results in family’sreluctance to finance a women’s venture, banker’s reluctance to take risk on projects setup by women, and a general unwillingness to accept women as decision makers or tostand as guarantors for loans to them (Nilufer, 2001). This phenomenon suggests thatspecial efforts and programs are needed to promote and support women’sentrepreneurship.

Generally speaking, in developing countries women face two main challenges inpromoting enterprises: the first is legitimizing and strengthening the base of existingwomen-owned enterprise as many of their enterprises are not identified in any basicforms. The second is promoting entrepreneurship and business opportunities with highgrowth potential among educated and skilled women. On one hand, these groups ofwomen might be successful in self-business, and on the other hand, they find it difficultto obtain jobs because of gender discrimination and stereotyping. Thus, strong support

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for the later challenge enables women to make successful businesses from the start, andhave the potential for high growth and employment creation (ILO, 2007). This is reallyimportant for Bangladesh as the majority of the semi-educated or educated unemployedwomen come from middle-class families. The majority of these groups of women areacting as housewives and stay at home without employment. Such a group of womenalways lack socio-cultural and a material support system to survive in their employmentor developing self-enterprise. Although 18,000 non-governmental organizations (NGOs)are working to provide support for women development in Bangladesh, few of them areworking on this group of women (ILO, 2007).

Several studies have been carried out on women entrepreneurs in developingcountries such as Bangladesh, Ethiopia, Tanzania and Zambia, Pakistan, and India(see ILO working papers by Marcellina et al., 2002; Zewde & Associates, 2002; JuleDevelopment Associates International – JUDAI, 2002; Nilufer, 2001). Many studies alsohave been carried out on either female or male or both entrepreneurs in Bangladesh(see, for example, Planning Commission, 1990; Khurshida, 1992; ILO, 1995; Quddus et al.,1996; Labor Force Survey – LFS, 1995/1996; ADB, 2001). However, the scope andfindings of these studies are varying widely and incomparable to each other since theyhad different objectives (Nilufer, 2001). Mark et al. (2006) also pointed out that researchon entrepreneurial activity is both widespread and multidisciplinary in nature.Moreover, there is hardly any study carried out on the semi-educated or educated groupsof women in Bangladesh. Thus, it is of paramount importance to identify the factorsinfluencing these groups of women in Bangladesh. The outcome of the current study canbe used by policy makers as well as NGOs to formulate a financial policy aiming athelping Bangladeshi women in starting-up their businesses. A policy that takes intoaccount the factors that affect women decisions to start their own businesses will help increating job opportunities among women. As a consequence, the outcome of the studycan assist in the economic development of Bangladesh. In this study, the attempt is madeto explore factors that affect urban women’s enterprise development. Some policies andissues to enhance women’s enterprise development are also explored.

Previous related researchEntrepreneurship, entrepreneurs, entrepreneurship development, and enterprise sizeIt is difficult to define entrepreneurship as entrepreneurial activities substantially varyfrom one to another. Entrepreneurial activities are normally dependent on the type oforganization being operated. As such, scholars have been inconsistent in theirdefinitions of entrepreneurship (Brockhaus and Horwitz, 1986; Gartner, 1988).However, the frequently quoted definition of entrepreneurship is that developed byGartner (1988) who viewed entrepreneurship as a wide range of activities including thecreation of an organization. The entrepreneur implements change within marketsthrough carrying out new combinations. This can be viewed through:

. introducing an advanced quality;

. introducing a sustained new production process;

. opening a novel market facility;

. creating a new supply chain; and

. carrying out a new empowered organizational structure (Schumpeter, 1934).

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Thus, an entrepreneurship can be defined as the wide range of activities that create andinnovate an enterprise by the combination of all the resources while considering itsprobabilities of success and failure.

The issue of women and men’s entrepreneurship has received growing attentionamong policy makers in the developing as well as developed countries. Women andmen’s entrepreneurial activities are an important factor in creating and increasingemployment opportunities and ensuring economic growth (Costanza et al., 2003). Overthe last decade, women and men’s entrepreneurship have become more important anddocumented in 55 United Nations Economic Commission for Europe countries. Womenentrepreneurship became an essential topic of research and discussion in the USA in the1970s. The transition from communist states to market-based economics has introducedmore attention to entrepreneurship in former communist countries since 1990s(Costanza et al., 2003). Women entrepreneurship became one of the prime topics of policymakers and development organization in developing countries since 1980s. In thisrespect, women entrepreneurship has received growing attention in Bangladesh since1980s especially after the introduction of Grameen Bank of Novel literate Dr Yunus.

On the other hand, different definitions have been put forward for an entrepreneur.McClelland (1961) described an entrepreneur as being primarily motivated by anoverwhelming need for achievement and strong urge to build. Busenitz and Barney(1997) claim entrepreneurs are prone to overconfidence and over generalizations. To aneconomist, an entrepreneur is one who brings resources, labor, materials, and otherassets into combinations that make their value greater than before, and also one whointroduces changes, innovations, and a new order. To a psychologist, such a person istypically driven by certain forces, the needs to obtain or attain something, to experiment,to accomplish, or perhaps to escape the authority of others. To a businessman, anentrepreneur can be a threat, an aggressive competitor, whereas to another businessmanthe same entrepreneur may be an ally, a source of supply, a customer, or someone whocreates wealth for others, as well as finds better ways to utilize resources, reduce waste,and produce jobs others are glad to get (Hisrich et al., 2005).

Nilufer (2001) described an entrepreneur as any person who possesses the abovequalities and uses them in setting up and running an enterprise. Entrepreneurs areenterprise builders – they perceive new business opportunities, organize businesseswhere none existed before, direct these businesses by using their own and borrowedfund, take the associated risks, and enjoy profit as rewards for their efforts. Takinginto consideration the definitions discussed above, an entrepreneur can be defined as “aperson who brings all the required resources for innovation, production and renovationwhile considering the associated risks.”

There is no internationally recognized definition for entrepreneurship, and womenentrepreneur, in particular. OECD (1998) has referred women entrepreneur as equallyto someone who has started a one-woman business, to someone who is a principal in afamily business or partnership, or to someone who is a shareholder in a publicly heldcompany which she runs. An ILO study carried out by Marcellina et al. (2002) hasdefined women enterprises as ones that were started, owned, and managed by women.

At this stage, it is important to consider entrepreneurship development. Accordingto an ILO study undertaken by Nilufer (2001), entrepreneurship development refers totraining and other support services incorporated within a structured program designedto assist individuals and groups interested in becoming entrepreneurs and starting

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small businesses. Entrepreneurship development is an initiative that recognizesentrepreneurs’ problems and launches programs to solve those problems to enableentrepreneurs to become active in the innovation process.

Kantor (2001) has considered gender sensitive policies and programs that explicitlyrecognize differences between women and men, and that these differences will impactwoman or man’s ability to participate in entrepreneurship. Gender specific policies andprograms targeted specifically women in order to benefit them within the currentcontext of gender relations can be considered as women entrepreneurship development.

On the other hand, different definitions have been used to identify enterprise size.According to a World Bank study, statistical definition of small and medium scaleenterprise varies by country and usually based on the number of employees or the value ofassets (Kristin, 1999). Even within each country, different institutions adopt various broaddefinitions of small enterprises (Jarrett, 2005). Thus, it is important to reach a commonunderstanding of what constitutes a small enterprise in order to facilitate a sustainedsupportive environment for women’s small enterprise development (SEED). In the UK,small enterprises are usually defined as ventures with less than 50 employees, where oftenconcentration of ownership is in the founder-owner or manager (Jarrett, 2005).

The European Commission (2003) defined enterprises as micro, small or medium sizeenterprises. Micro-enterprises are enterprises which have fewer than ten employees.Small enterprises have between ten and 49 employees and they should have an annualturnover not exceeding e7 million. Medium-sized enterprises have fewer than250 employees and their annual turnover should not exceed e40 million.

A World Bank study carried out by Kristin (1999) has classified enterprises as micro,small and medium enterprises. Micro-enterprises are normally family businesses orself-employed persons operating in informal or semi-formal sectors. Serving themoften requires distinct institutions and instruments, such as the group-basedlending methodologies used by some microfinance institutions. In contrast, small- andmedium-sized enterprises usually operate in the formal sector of the economy, employmainly wage-earning workers, and participate more fully in organized markets.

A number of studies of commissioned by the ILO, for example, ILO (2006) andMarcellina et al. (2002) have defined enterprises as micro, small and medium sizeenterprises. ILO (2006) also pointed to three phases of enterprise development:micro-enterprise often not registered as a petty trading; small enterprise usuallyregistered, with a few employees; medium enterprise beyond self-employment. AnotherILO study undertaken by Marcellina et al. (2002) has defined small enterprises as onesthat employ ten to 49 employees. Micro-enterprise are those with 1-9 employees.

Factors affecting women’s small enterprise developmentDecent Work support program of the ILO has created a number of International Focus(InFocus Program – IFP) to Boost Employment through SEED (IFP/SEED) (ILO,1998). One of the major components of the ILO’s IFP/SEED program is Women’sEntrepreneurship Development and Gender in Enterprises (WEDGE). In order toachieve IFP/SEED’s goals, it has adopted three linked strategies:

(1) developing the knowledge base;

(2) promoting advocacy and voice; and

(3) developing innovative support services and products (technical tools).

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These have been adopted in all works undertaken by the WEDGE team in developingcountries.

Based on aforesaid strategies, ILO has undertaken country and/or region-specificresearch that cover the issues affecting women entrepreneurs and women’sentrepreneurship development. The research has produced a series of working papers.Among such working papers, the most significant research has carried out in Ethiopia,Tanzania and Zambia, Pakistan, Bangladesh, and India (ILO, 2003). Almost all theworking papers (see ILO working papers by Marcellina et al., 2002; Zewde & Associates,2002; JUDAI, 2002; Nilufer, 2001) have used common factors that affect women’sentrepreneurship development. Among these factors are: socio-economic, strategies andbehavioral, motivational, enterprise consolidation, business idea, market and marketinformational factors, etc. A study conducted by ILO (2006) referred to four personal andfour external factors that influence women entrepreneurs’ success. The personal factorscomprise:

(1) motivation and commitment;

(2) abilities and skills;

(3) ideas and markets; and

(4) resources.

On the other hand, external factors consist of:

(1) business development organizations;

(2) broader enabling environment;

(3) economic/market environment; and

(4) socio-cultural context.

The business development organizations factor considers the roles of government,NGOs, private sector, membership organizations, and donors. The broader enablingenvironment factor mulls over regulations, policies, institutions, and processes. Theeconomic/market environment factor ponders opportunities and threats (e.g. inflation,interest rates, economic trends, etc.). The socio-cultural context factor considersattitudes, aspirations, confidence, etc. Other factors such as age, education, and familystatus also influence women entrepreneurship development (Aldrich et al., 2000).Established business owner’s age is important as people gather additional contacts andsocial support through their involvement in associations, work, and family activities(Aldrich et al., 2000). In line with this, many researchers have found that average age ofbusiness owners is generally greater than that of employees (Aldrich et al., 1997, 1998;Carter, 1997; quoted by Aldrich et al., 2000).

Mark et al. (2006) mentioned that several international studies have been conductedon the relationship between general education and entrepreneurship (Mark et al., 2006;Aldrich et al., 2000; Acs et al., 2004; Autio, 2005; Minniti and Bygrave, 2003; Neck et al.,2003). However, most of these studies were inconsistent about education and businessownership (Aldrich et al., 1998; Gartner, 1988; Reynolds and White, 1997).

Women are influenced by socio-cultural complexities to become entrepreneurs indeveloping countries (Nilufer, 2001). The components of such socio-culturalcomplexities include ethnic diversity, religious value systems, and marital status.

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Previous research has found that there is no correlation between increasing ethnicdiversity and religious value systems and a reduction of business start-up rate(Carswell and Rolland, 2004). Salehi-Isfahani (2000) observed that married women havethe lowest participation rate in labor force followed by single and widowed women indeveloping countries.

Robinson (2001) referred to the push and pull factors that influence a woman tobecome an entrepreneur. The push factor is allied with negative environment, and thepull factor is attributed to positive developments. The push factor may result from lowincome, low job satisfaction or lack of job opportunities, and strict working hours. Thepull factor, however, may result from the need of fulfilling the desire to help others toattain self-accomplishment. As such, Sibin Wu et al. (2007) found a positive relationshipbetween the need for achievement and entrepreneurship persistence. As a result of sucha relationship, successful women showed consistently higher self-efficacy and need forachievement (Jo et al., 2006). The push and pull factors are considered as motivationalfactors. Orhan and Scott (2001) found that women entrepreneurs in the developingcountries were influenced by a combination of push and pull factors.

Previous studies demonstrated that women are less involved in network than menand even the network that they may establish is different than that established bymen (Granovetter, 1985; Burt, 2000). Moreover, women tend to have more ties to womenthan to men (Popielarz, 1999). Lin (1999) revealed that women’s network is mainlyrelated to family links and may prove to be an obstacle to business activities. Such aphenomenon could be a disadvantage in the overall business community for contactingwomen entrepreneurs, gathering information and other resources related to them.

Having an advanced business idea is one of the important tools to succeed inbusiness. However, the sources of gathering business ideas for women are limited. Assuch, JUDAI (2002) made the point that the majority of women in developing countriesobtain ideas from informal networks, spouses, and relatives or family which areeffective for start up and success in business. Women also lack appropriate technologyand related facilities that affect their success in developing countries (Zewde &Associates, 2002).

Family responsibility of married women is a potential constraint to their businessactivities. Contrary to this, family supports can be a pillar of their business success. Forexample, Marcellina et al. (2002) revealed that early socialization, childhoodexperiences, role models, and exposure have played a big role in motivating womento start business. Family support, husband’s support in particular, influence thesuccess of women’s business. Holmquist and Sundin (2002) reported that women lacktime for entrepreneurial activities due to family commitment.

Advocacy and decision-making process is vital for women’s enterprise developmentand success. Involvement in women organization may improve their advocacy anddecision-making capacity. However, women in developing countries lack effectivewomen organizations that impede their own decision-making. As such, Zewde &Associates (2002) observed that the absence of appropriate and effective organizationsfor women entrepreneurs affect women enterprise development in developingcountries. As a result, the majority of the women make their own decision and few ofthem consult with other family members (JUDAI, 2002).

Generally speaking, women-friendly laws and regulation have been enacted indeveloping countries. For example, the National Policy for Women’s Advancement of

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Bangladesh is to ensure equality of men and women in all spheres of national life,ensure security, education and empowerment, eliminate discriminations, and establishhuman rights of women (BBF, 2003). However, developing countries like Bangladeshand others are still highly segregated societies based on gender and class (ADB, 2001).Moreover, there are many laws and regulations in developing countries that womenfound them difficult to comply with and they inhibit them from conducting business(Marcellina et al., 2002).

One of the many problems that might confront women entrepreneurs is availabilityand use of financial resources. Owing to woman social position and familycommitment, it is difficult to secure the required money to run her business. In linewith this, Carter et al. (2001) pointed out that women entrepreneurs find it difficult toraise the start-up capital. The underlying fact of such difficulties is that women’s lackaccess to financial resources because of their poor track record, lack of collateral, andthe financial institution’s own limitations (Ngozi, 2002). Thus, it would seem thatwomen entrepreneurs face more difficulties to begin and pursue business start-upactivities than their men counterparts.

Drawing from the above-reviewed research, this study examines ten variablesexpected to influence women entrepreneurship development[1]. Details of the factorsemployed in this study and their measures (outcomes) are reported in Table I.

Women entrepreneurship in BangladeshBangladesh is an overpopulated country with poverty-stricken and limited resources.The society is highly segregated based on gender and class. Location is dictated byresources availability, services and opportunities. Nearly, half of the population of thecountry constitutes women. In recent years, there has been an increasing awareness ofwomen’s productive roles, mobility and contribution to the country’s development.They have been found to contribute tremendously to their households and economyand they have participated well in Bangladeshi society as teachers, lawyers,journalists, politicians and as informal workers (ADB, 2001).

Although the educational status of women shows increasing trends, the literacy rateamong women remains in average nearly 10 percent less than the male citizen. Theuniversity-educated women’s situation is not better than the illiterate womenpopulation of the country. For instance, in 1999, female students accounted for morethan 31.42 percent of the total students of the public universities. On the other hand, theshare of the women teachers remained only 15.69 percent. Women’s participation inprivate universities remained worse in the same year (Bangladesh Bureau of Statistics– BBS, 1999; quoted Dhaka Chamber of Commerce and Industries – DCCI, 2000).

The Constitution of Bangladesh pledges equal rights for all citizens, which is alsoreflected in national and local plan and development policies. There are, however,significant gender discrimination in all spheres and at all levels, as indicated by officialstatistics on health, nutrition, education, employment, and political participation. Forinstance, despite the quota that ensures women’s presence in local government and theNational Parliament, women still facing an ominous challenge. There has been agrowing influence of money in Bangladeshi politics, particularly in electoral politics,which acts as a further constraint on women’s political participation since few womenhave access to financial resources (ADB, 2001).

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209

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IJOA17,3

210

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Table I.

Women businessdevelopment

211

Several studies have been carried out on either female or male or both entrepreneurs inBangladesh (Planning Commission, 1990; Khurshida, 1992; ILO, 1995; Quddus et al.,1996; LFS, 1995/1996; ADB, 2001). The scope and findings of all these studies arevarying widely and incomparable to each other since they had different objectives(Nilufer, 2001). However, based on a study of the BBS in 1999, women are largelyinvolved in the non-monetized sectors and in subsistence activities.

Women’s involvement is either as self-employed or employed in family-basedenterprises in the rural informal sector. Most of such enterprises are based on bothagricultural and non-agricultural sector. Agriculture is the pre-dominant source offemale employment in rural areas, and the traditional manufacturing sector holdssecond position which is the habitual and hidden sources to family income. Accordingto a study conducted by the ADB (2001), within the formal sector, a large number ofwomen work in export-oriented industries such as garments, the source of 70 percent ofBangladesh’s foreign exchange.

According to the LFS in 1996, quoted by DCCI, 2000, the entrepreneurship status ofwomen constitutes 8.3 percent, which is really small compared to men that reached46.8 percent of the self-employed citizen. The situation in urban Bangladesh is, however,a little better. In urban areas, nearly 15.4 percent of the 36.7 percent self-employed peopleare women. In rural area, it is only 7.4 percent of 47.6 percent self-employed population.The situation of unpaid family labor women in rural and urban areas which constitutes83.2 and 42.9 percent, respectively, is even worse. Furthermore, a significant proportionof poor women work as day laborers who are form a direct source of family income.

The government civil society including women organizations and NGOs havebought forward women issues and interests onto the country’s developmentagenda. As a result of such concerted efforts, women’s enterprises conditions areimproving gradually. Recently, women are entrepreneurs and own enterprises,occupies top management and policy-making positions in both private and publicsector enterprises. Contrary to this, beforehand, women’s enterprises were cramped intraditional gender dominated sectors, such as education, health, food and beverage,webbing, tailoring, beauty-parlor, wholesale, and retail apparel trade.

Research approachData collectionAs mentioned earlier, the main objective of this study is to identify factors that influencewomen entrepreneurship development in Bangladesh. To achieve this objective, aquestionnaire that contains various aspects of entrepreneurship was designed. Toassess the suitability, readability, and understanding of the questionnaire, a pilot studywas undertaken by a group of Bangladeshi women who were invited to comment on anearly version of the questionnaire. Some of the comments received were useful andincorporated in the final draft of the questionnaire. The English version of thequestionnaire was then translated from English to Bengali and verified by a linguistspecialist. The questionnaire was then ready for distribution. During the period betweenAugust 15 and September 5, 2007, 300 copies of the questionnaire were distributedamong a random sample of Bangladeshi women in Dhaka city and its vicinities. A totalof 200 questioners were completed and returned. After screening the collectedquestionnaires, it was evident that 34 questionnaires were not properly completed(some of the main sections of the questionnaires were not completed by the participants)

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and excluded from the analysis. Hence, this process resulted in a useful response rate of55 percent.

To assess the reliability of the collected data, a reliability test was executed. TheCronbach’s alpha for the collected data was 0.913[2]. In social studies research, 0.70 ormore Cronbach’s alpha value will be good enough to insure data reliability.

Although the conducted empirical analysis was based on the collected primary data,secondary data have been used to construct supporting reviews of the study. The data areobtained from publications, existing reports and web sites on the related area. Thisincludes annual and technical reports from government agencies, internationalorganizations, published, and unpublished articles as well as any other relevantinformation.

The questionnaire survey employed in this study confines only to women populationwho passed grade five and above as semi-educated or educated women respondentsgroup. The study also excludes homeless women or those who live in the slum urbanareas. The study employs ILO definition of small and micro-enterprises that areemploying ten to 49 and one to nine employees, respectively (see the review section fordetails).

ModelAs mentioned earlier, this study is set out to identify factors affecting urban women’sself-enterprise development. The study adopts a quantitative and qualitative analysesof these factors. The attempt is, therefore, made to estimate the following statisticalmodel:

We ¼ f X1

X1

nv1;X2

X1

nv2;X3

X1

nv3;X4

X1

nv4 . . . Xn

X1

nvn

� �

where: We, women’s willingness in self-enterprise development; X1 to Xn, factorsaffecting women’s enterprise development; v1 to v2, vectors by which the factors areconstructed.

In order to measure women’s willingness to be a self-entrepreneur, the ratingschedules used included strongly agree to strongly disagree carrying the scores 5 to 1.

Drawing from previous research, the current study will test ten factors. Details ofthe factors employed in this study and expected measures (outcomes) of each factor aredepicted in Table I.

Results and discussionsParticipants’ personal backgroundA summary of the participants’ background is reported in Table II. It is clear fromTable II that 44 percent of those who have participated in the survey are single and54 percent are married. More than half of the participants indicated that they arewithout work or housewives. However, only 11 percent of them showed that they areself-employed. As predicted, 88 percent of the participants are Muslims. This reflectsthe Islamic nature of Bangladesh. Since the questionnaire was mainly distributed in theCapital city, 61 percent of the participants were from Dhaka. On the other hand, Table IIshows that only 44 percent of the participants have specific level of educationmainly from local academic institutions. This means that a major proportion of theBangladeshi women have low level of education.

Women businessdevelopment

213

Socio-cultural factorsA list of socio-economic factors that might affect women’s decision to develop theirown enterprises was included in the questionnaire and the participants were invited toexpress the extent of their agreement with each of them. Analysis of the participants’answers is summarized in Table III. It can be seen from the table that Bangladeshiwomen seem to encounter problems in making their businesses in every step that theymake. This can be clearly noticed from the reported mean and median where almost allparticipants either strongly agreed or agreed with this factor. Other factors such as

Variable Frequency % Cumulative %

Marital statusSingle 77 43.5 43.5Married 100 56.5 100.0Experience1-5 years 75 42.4 46.66-10 years 77 43.5 94.4More than 10 years 9 5.1 100.0ReligionIslam 155 87.6 87.6Hindus 14 7.9 95.5Christian 7 4.0 99.4Others 1 0.6 100.0EmploymentUnemployment 33 18.6 18.6Self-Employed 20 11.3 29.9Housewife 61 34.5 64.4Public Sector Employee 13 7.3 71.8Private Sector Employee 50 28.2 100.0Education specializationNo specialization 100 56.5 56.8Business 5 2.8 59.7Law 7 4.0 63.6Education 25 14.1 77.8Engineering 9 5.1 83.0Other 30 16.9 100.0AgeLess than 20 years 43 24.3 24.320-30 years 98 55.4 79.731-40 years 31 17.5 97.241-50 years 5 2.8 100.0Place of livingCapital city 108 61.0 61.0Outside capital city 68 38.4 99.4Education levelBelow secondary 46 26.0 26.0Secondary 49 27.7 53.7Diploma 5 2.8 56.5BA and BCom 37 20.9 77.4JobFull time 157 88.7 94.6Part time 8 4.5 99.4

Table II.Respondents’background information

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214

No.

Fac

tor

Mea

nM

edia

nS

DM

in.

Max

.R

ank

(bas

edon

mea

n)

Soc

io-c

ultura

l1

Soc

io-c

ult

ure

fact

ors

affe

cts

my

inv

olv

emen

tin

self

-bu

sin

ess

3.32

3.0

1.35

15

22

Rel

ativ

ean

dfr

ien

ds

com

men

tsaf

fect

my

inv

olv

emen

tin

self

-bu

sin

ess

2.9

3.0

1.36

15

33

Nei

gh

bor

sco

mm

ents

affe

ctm

yin

vol

vem

ent

inse

lf-b

usi

nes

s2.

562.

01.

301

54

4R

elig

iou

sb

ind

ing

affe

ctm

yin

vol

vem

ent

inse

lf-b

usi

nes

s2.

22.

01.

411

55

5A

sa

wom

an,

Ifa

cep

rob

lem

sin

mak

ing

bu

sin

ess

inev

ery

step

that

Ita

ke

4.10

5.00

1.41

15

1M

otiv

ati

on1

Av

aila

bil

ity

ofm

otiv

atio

nal

fact

ors

wil

laf

fect

my

dec

isio

nto

bu

ild

self

-en

terp

rise

3.70

41.

301

52

2T

he

des

ire

for

fin

anci

alin

dep

end

ence

isth

em

ain

fact

orof

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

4.61

50.

771

51

Mark

etand

info

rmati

onnet

wor

k1

Mar

ket

net

wor

kaf

fect

my

dec

isio

nto

bu

ild

self

-en

terp

rise

3.53

4.0

1.21

15

32

Info

rmal

net

wor

kaf

fect

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

4.29

5.0

1.16

15

13

Mar

ket

and

info

rmal

net

wor

kaf

fect

my

dec

isio

nto

bu

ild

self

-en

terp

rise

3.85

4.0

1.18

15

2A

dvo

cacy

and

dec

isio

nm

akin

g1

Par

tici

pat

ion

inw

omen

asso

ciat

ion

isim

por

tan

tto

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

3.47

3.0

1.11

15

22

Mor

ead

voc

acy

and

voi

ceis

imp

orta

nt

tom

yin

vol

vem

ent

ind

evel

opin

gse

lf-e

nte

rpri

se3.

384.

01.

181

53

3D

ecis

ion

mak

ing

isim

por

tan

tto

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

4.39

5.0

0.94

15

1W

oman

chara

cter

isti

cs1

Fin

anci

alsu

pp

ort

isim

por

tan

tto

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

3.82

4.0

1.11

15

22

Sta

rt-u

pca

pit

alis

imp

orta

nt

tom

yin

vol

vem

ent

ind

evel

opin

gse

lf-e

nte

rpri

se4.

184.

00.

961

51

3A

cces

sto

cred

itfr

omb

ank

sis

imp

orta

nt

tom

yin

vol

vem

ent

ind

evel

opin

gse

lf-e

nte

rpri

se3.

063.

01.

301

44

4A

cces

sto

cred

itfr

omn

on-g

over

nm

enta

lor

gan

izat

ion

isim

por

tan

tto

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

2.60

2.50

1.16

14

5

(con

tinued

)

Table III.Factors that affect

business development bywomen in Bangladesh

Women businessdevelopment

215

No.

Fac

tor

Mea

nM

edia

nS

DM

in.

Max

.R

ank

(bas

edon

mea

n)

5A

cces

sto

cred

itfr

omg

over

nm

ent

isim

por

tan

tto

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

3.40

3.0

1.37

15

3F

am

ilyst

atu

s1

Bu

sin

ess

idea

saf

fect

my

inv

olv

emen

tin

self

-en

terp

rise

3.51

4.0

1.28

15

42

Kn

owle

dg

e/sk

ills

/ex

per

ien

ceaf

fect

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

4.24

5.0

1.08

15

13

My

inte

rest

and

hob

bie

saf

fect

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

4.14

5.0

1.20

15

24

Pro

fit

mot

ive

affe

ctm

yin

vol

vem

ent

ind

evel

opin

gse

lf-e

nte

rpri

se3.

674.

01.

091

53

5C

ond

uct

ive

bu

sin

ess

env

iron

men

t(c

omp

etit

ion

)aff

ect

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

2.84

3.0

1.15

15

66

Av

aila

bil

ity

ofre

qu

ired

reso

urc

esaf

fect

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

2.91

3.0

1.38

15

5F

inanci

al

1S

pou

seoc

cup

atio

naf

fect

my

inv

olv

emen

tin

dev

elop

ing

self

-en

terp

rise

3.0

3.0

1.37

15

32

Fat

her

’soc

cup

atio

naf

fect

sm

yin

vol

vem

ent

ind

evel

opin

gse

lf-e

nte

rpri

se3.

163.

01.

371

52

3R

esp

onsi

bil

ity

for

chil

dre

nan

dh

usb

and

inre

sid

ence

affe

ctm

yin

vol

vem

ent

ind

evel

opin

gse

lf-e

nte

rpri

se4.

014.

01.

201

51

Table III.

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216

neighbors and relatives comments do have impact on women entrepreneurs inBangladesh. Religion appears to have the lowest impact on a woman’s decision tobecome an entrepreneur. This result lends support to the outcome of a studyundertaken by Al-Lamky (2005) and covered Bahrain and Oman. In this study, theyfound religion has no impact on women’s decision to become self-employed.

Motivational factorsOut of the two motivational factors presented to the participants in the questionnairesurvey, the desire for financial independence received high degree of agreement asindicated in Table III. A significant percentage of the participants showed that theystrongly agreed with this factor. This factor provides women with self-fulfillment andenhances their social position.

Market and informational network factorsThe literature review indicated that women tend to face problems in moving aroundfreely in the market. They encounter difficulties in establishing the right network withcustomers, suppliers and banks. This factor has been put to the participants and theywere asked to express the degree of their agreement with each of them. The results oftheir answers are shown in Table III. It is evident from the table that Bangladeshiwomen encountering market and informal network obstacles in developingself-enterprise. This result is documented by the reported means and medians. Theresult is in line with previous research undertaken by Granovetter (1985), Aldrich andZimmer (1986) Burt (2000) and Al-Lamky (2005). In this context, Lin (1999) contendedthat women’s network is generally restricted to family connections which can becounterproductive in business terms.

Advocacy and decision-making factorsA number of factors that may emphasize the role of women in developing enterprisesincluding their membership in women associations were asked to see whether theyaffect the respondents decisions in starting their own businesses. There was consensusamong the participants that decision making is important to their involvement indeveloping self-enterprises as reflected by the reported mean, median and the relativelylow standard deviation. There was less agreement on the relationship between womenmembership in associations and their role in business development. This resultemphasizes the fact that women tend to get involved in self-enterprises to ensureself-fulfillment. The result is in line with previous studies. For example, empiricalevidence from Islamic countries as Bahrain and Oman revealed that self-fulfillmentmotivated women to become entrepreneurs (Al-Lamky, 2005).

Women characteristicsAnother factor that appeared in the literature to affect women involvement inself-business is their characteristics. Women’s knowledge, skills, experience, ability tofind opportunities (new business ideas), interest, and hobbies are all factors that caninfluence women entrepreneurs. These questions were asked to explore whether theyhave any impact on their decision to become self-employed. It can be observed fromTable III that the participants almost totally agreed that their knowledge, skills,experience, interest, and hobbies are all important to their decision to become

Women businessdevelopment

217

self-employed. Although the resulted median of the business ideas factor pointed to anagreement among the participants that this can be a determinant factor of womeninvolvement in businesses enterprises. The resulted mean, however, seem to giveconflicting result.

Family statusAnother factor documented in the literature to be a major factor that dictates womendecision to become self-employed is family commitments. For instance, spouse andfather’s occupation might play a major role in the development of a woman business.Responsibilities towards children are another factor that can affect a woman’s decisionto start a business enterprise. The outcome of the analysis reported in Table III pointedto responsibility towards children as the main factor that may deter women inBangladesh from launching their own businesses. This result is consistent withprevious research undertaken in different countries such as: Ivory Coast, Ethiopia,Mali, Morocco, Senegal, Zimbabwe – de Groot (2001) and Sweden – Holmquist andSundin (2002)). Factors such as spouse and father’s positions do not seem to be an issuefor women in Bangladesh. The fact that most of the women who took part in the surveyare educated or semi-educated and they are unemployed means that they are comingfrom middle class families. The high rate of single women participating in the surveymakes it irrelevant when they were asked about their spouses. Thus, spouses andfathers have no influence on women involvement in business development inBangladesh.

Financial resourcesThe participants were asked to express their level of agreement with availability offinancial resources to start their business enterprises. Table III shows that it isimportant for women in Bangladesh to obtain financial support and to secure a start-upcapital before launching their own businesses. Given that the vast majority of theparticipants are without work or housewives, it is going to be difficult for them tosecure a start up capital or even to find any source of finance. In this regard, Carter et al.(2001) made the point that women entrepreneurs find it difficult to raise the start-upcapital since they do not have the required wealth; they cannot secure the requiredcollateral to obtain a bank’s loan; due to their social position they cannot establishfinancial network available to men and they cannot establish good relationships withbanks since they encounter gender discrimination and stereotyping.

Results of the regression analysisTo establish the relationship between women business development and the factorsdiscussed in this study, a stepwise regression was executed. Under the stepwiseregression model, a procedure is built to select predictor variables one by one thatallows the most significant variable to enter at each step. Significant explanatoryvariables are included in the final regression mode. The result of the regressions ispresented in Table IV. It is evident from the table that factors such as women’smembership in associations was negatively and significantly affects women decisionto develop a business. The factor accounted for 29 percent of women’s decision onwhether to get involved in developing their own businesses. Another factor thatappeared to be positively and significantly associated with a women’s decision in

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developing their businesses was advocacy of decision making (self-fulfillment). Thisfactor accounted for more that 22 percent of the variations in the women decision asreflected by the reported adjusted R 2. The last factor that appeared to be negativelyand significantly correlated with a women’s decision to become entrepreneurs is theirknowledge. This factor also appeared to explain 22 percent of women decision’s to takepart in business development.

The result of the regression analysis is not surprising. Women activelyparticipating in women’s association may have little time to start-up or run theirown businesses. These women are viewed as being politically active. Hence, they havelittle incentive to develop their own businesses. Another reason might be that there is anegative perception on those who are actively participating in women association interms of existing socio-cultural point of view. Knowledgeable women tend to join theeducation sector. This profession separates males from females and many conservativefamilies want to see the daughters joining this sector. The only positive and significantfactor that appeared to affect a women’s decision in developing their own businesses isadvocacy of decision making (self-fulfillment). It is very likely that rich women orwomen coming from the middle class or upper class to specialize in business studiesrather than specializing in education. They try to realize self-fulfillment by developingtheir own businesses. They have the academic qualifications and the financial meansto launch their own businesses. Middle and upper class families tend to be lessconservative than poor families. Hence, these women receive social as well as financialsupport from their families. Since their parents and relatives have developed goodrelationships with bank managers and suppliers, they will find it easy to find their wayto different sources of finance and to suppliers. After all, banks managers as well assuppliers will rely on the fathers’ or an influential relative’s name to lend them moneyor to deal with them.

ConclusionThis study set out to investigate business development by women in Bangladesh.A number of factors captured by previous studies were tested in this empirical study.

B t-statistics Significance

Model 1Constant 4.949 0.000Participation in women associations 20.580 22.667 0.018

F ¼ 7.13 Sign. F ¼ 0.018 Adj. R 2 ¼ 0.29Model 2Constant 3.423 0.005Participation in women associations 20.944 24.212 0.001Advocacy and decision making 0.611 2.727 0.017

F ¼ 8.910 Sign. F ¼ 0.004 Adj. R 2 ¼ 0.513Model 3Constant 5.842 0.000Participation in women associations 20.898 25.463 0.000Advocacy and decision making 0.866 4.830 0.000Knowledge 20.543 23.508 0.004

F ¼ 15.208 Sign. F ¼ 0.000 Adj. R 2 ¼ 0.740Table IV.

Regression analysis

Women businessdevelopment

219

Descriptive statistics showed that the following factors affect women decision towardsbusiness development: desire for financial independence and decision making; marketand informational network availability of a start-up capital; knowledge, skills andexperience; and responsibility towards children. On the other hand, the regressionanalysis showed that factors such as women membership in professional associations,advocacy and decision making (self-fulfillment) and women knowledge were the mainfactors influencing women decisions to become self-employed. These three factorswere responsible for 75 percent of women business development decisions. The resultof the analysis seems to point out that business development is almost completelyrestricted to middle and upper class women. In realty, these two categories of socialclasses in Bangladesh account for a small proportion of the total population. Hence, asignificant proportion of the Bangladeshi society is not taking part in businessdevelopment. To increase women involvement in the economic development ofBangladesh, the government together with the NGOs operating in Bangladesh shouldtarget this group of women who have the potential to start up their own business butthey are deprived due to the lack of financial resources or social values prevent themfrom developing their own businesses. Religious leaders can also play an active role inincorporating women in the economic development of Bangladesh.

The adjustment and/or improvement of aforesaid factors enhance womenentrepreneurship development in Bangladesh. A concerted effort from thegovernment, NGOs, civil society and local community is therefore considered necessary.

It should be emphasized that the focus of this study was on the semi-educated oreducated women living in the capital city of Dhaka. To give a clear picture of factorsthat may affect women business development in Bangladesh, women representingother parts of the country should be included in the survey of a future study. A futurestudy that identifies a number of successful women entrepreneurs in Bangladesh andthe reason behind their success can help policy makers formulating their strategytowards incorporating women in future economic development of the country.

Notes

1. The choice of the ten variables was based on the fact that these variables were heavilyinvestigated in previous studies. Exploring the same factors provides a legitimate ground forcomparison.

2. The main reason for determining the Cronbach’s alpha is to assess the reliability of therespondents’ answers to all sections of the questionnaire, rather than specific sections of thequestionnaire.

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About the authorsAmzad Hossain is an Assistant Professor of Economics and Chairman of Finance and BankingDepartment, Al Ain University of Science and Technology, UAE. He has also worked as anAssistant Professor and/or Lecturer at the Ajman University, UAE; Multimedia University,Malaysia; and National University of Malaysia. He also possesses three years of industryexperience in community development. He has published nine research papers in internationalreputed journals including Emerald journals. He has presented and published about 25 researchpapers at international and national conferences around the world. He has also undertakenconsultancy projects at private sectors. His research interests covers sustainable business, smallbusiness and regional economic developments. Amzad Hossain is the corresponding author andcan be contacted at: amzad4@yahoo.com

Kamal Naser is a full Professor of Accounting and Finance with more than 25 years ofacademic experience in universities operating in Palestine, UK, Qatar, Lebanon, Syria, Kuwait,Libya, and UAE. He has also held many administrative positions such as Head of Department,

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College Dean, and Vice-president at several universities. He is an active researcher and publishedmore than 45 research papers in reputable international academic journals. He is also serving onthe editorial board of a number of international academic journals. He was also involved in manyconsultancy projects commissioned by the UNDP, ODA, and Kuwait Fund. His research coversthe areas of corporate social responsibility and corporate disclosure, financial sector’scontribution to economic development, women entrepreneurship in the Arab countries,determinants of dividend policy, Middle-East banking and finance and Middle-Eastern stockmarkets.

Asif Zaman is a Lecturer at the College of Business Administration, Al Ain University ofScience and Technology.

Rana Nuseibeh is a Link Officer at the National Health Service (NHS), Cardiff, UK. She haspublished research papers in a number of international academic journals.

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