Ministry of Minority Affairs

Executive Summary In the present era, the role of women entrepreneurship has been recognized in the process of economic development worldwide; hence, it must be promoted. Before designing any policy intervention to boost women entrepreneurship, it is important to understand the factors driving women to become entrepreneurs. The previous research on women entrepreneurship was preoccupied with performance of businesses run by women. This research aimed at answering the question: ‘What motivates or discourages the women of a society or an economy from becoming an entrepreneur?’ More specifically, this research investigates factors affecting the entrepreneurial propensity of Indian women through the lenses of cognitive and social capital perspectives. The present study is steered to enhance the understanding of women entrepreneurship at a niche level. Scholars have tried to explain factors affecting women entrepreneurship using myriad of approaches. However, these approaches have been criticized on methodological, conceptual and predictive ability weaknesses. Recently, cognitive and social capital perspectives have gained currency in explaining entrepreneurship. The purpose of this study was to examine the influence of cognitive factors—opportunity perception (Hypothesis 1), risk perception (Hypothesis 2) and perceived capabilities (Hypothesis 3)—and social capital factors—social networks (Hypothesis4) and informal investment (Hypothesis 5)—on women’s entrepreneurial propensity in India, a developing country. A data set of Global Entrepreneurship Monitor Adult Population Survey including a sample of 1305 Indians was used and binary logistic regression technique was employed to analyse the data. The finding shows that the entrepreneurial opportunities have no significant influence on women entrepreneurship; risk perception discourages women from becoming entrepreneurs, and perceived capabilities influence the decision of women to engage in entrepreneurship; social network motivates women to be entrepreneurial, and being an informal investor encourages them to start their venture. Surprisingly, we do not find support for opportunity perception. Therefore, policymakers should pay more attention to these factors of perception and social networks so that, the propensity of a woman to become entrepreneur would be increased.