The gender gap in entrepreneurship undermines economic growth, which emphasizes the importance of understanding what impedes business formation by women. Utilizing a staggered reform that granted women from specific religious groups inheritance rights equal to men, I examine whether relaxing financial constraints in the presence of discriminatory social norms fosters entrepreneurship among women. Exploiting variation in inheritance rights across gender and religion, I find that the reform significantly increased firm creation by women without worsening the quality of new entrants. Post reform, collateral enables financial inclusion and leads to business formation. Overall, results suggest that improved access to finance can narrow the gender gap in entrepreneurship, even in the...[ Read more ]

The gender gap in entrepreneurship undermines economic growth, which emphasizes the importance of understanding what impedes business formation by women. Utilizing a staggered reform that granted women from specific religious groups inheritance rights equal to men, I examine whether relaxing financial constraints in the presence of discriminatory social norms fosters entrepreneurship among women. Exploiting variation in inheritance rights across gender and religion, I find that the reform significantly increased firm creation by women without worsening the quality of new entrants. Post reform, collateral enables financial inclusion and leads to business formation. Overall, results suggest that improved access to finance can narrow the gender gap in entrepreneurship, even in the presence of discriminatory social norms.