Social capital and female entrepreneurship in rural regions: Evidence from Vietnam

An emerging literature suggests that distressed regions tend to be characterized by strong social structures that may be mobilized as social capital for entrepreneurial activities. This paper examines the role of social capital on female entrepreneurship (measured by self-employment) in two distressed regions in Northern Vietnam. Social capital is investigated at two geographical scales, namely the micro (family), and the macro (Women's Union). The role of market access is also highlighted given the geographically disadvantaged location of the regions. Logistic regressions based on survey data indicate that family social capital increases the women's probability of becoming entrepreneurs but institutional social capital has the opposite effect. As part of family social capital, children and male family members contribute to labor, income and community networks. The Women's Union, on the other hand, is overly embedded at Vinh Loc resulting in negative network externalities. Distance to public markets significantly raises the probability of female entrepreneurship. Finally access to capital, that is the number of micro-finance loans and minimum loan size have a positive effect.