Research Seminar Series on Global Challenges – Alexia Delfino (Bocconi University), 3rd March 2022 at 12.15 p.m. (CET)

Global Challenges Seminar Series

Alexia Delfino (Bocconi University) on Female Entrepreneurship and Trust in the Market (with N. Ashraf and E. Glaeser), jointly organised by the Centro Studi Luca d’Agliano, BAFFI CAREFIN and the Department of Economics, Management and Quantitative Methods (University of Milan) in collaboration with the Dipartimento di Economia, Metodi Quantitativi e Strategie di Impresa (Università Milano Bicocca) and the Dipartimento di Ingegneria Gestionale (Politecnico di Milano) and the Department of Economics (University of Insubria).

The seminar will be held on Thursday, 3rd March 2022 at 12:15 p.m. (CET) in a hybrid format:

– DEMM seminar room, Via Conservatorio 7, 2nd floor. According to the current COVID measures, the seminar room can accommodate 20 people.

– Via Zoom. Please register by email to centro.dagliano@unimi.it

Abstract

Commerce requires trust, but trust is difficult when one group consistently threatens to expropriate or mistreat another. If men have a comparative advantage at violence, then without rule-of-law, unequal bargaining power can lead women to segregate into low-return industries and avoid entrepreneurship altogether. We present a model of female entrepreneurship that predicts women will only start businesses that interact primarily with men when external authorities, such as courts, can enforce contracts ex post, and when social norms support female bargaining power ex ante. The model’s predictions are supported both in cross-national data and with a new census of Zambian manufacturers. In Zambia, female entrepreneurs collaborate less, learn less from fellow entrepreneurs, earn less and segregate into industries with more women, but gender differences are ameliorated when women have access to adjudicating institutions, such as Lusaka’s “Market Chiefs” who are empowered to adjudicate small commercial disputes. We experimentally induce variation in local institutional quality in an adapted trust game, and find that this also reduces the gender gap in trust and economic activity.