Center for Effective Global Action

This paper examines an underexplored determinant of women’s business performance: the preferences female entrepreneurs hold over the types of customers and suppliers they want to engage with and the environments they seek to avoid. We study how female entrepreneurs trade off  profit against attributes of potential business interactions - specifically the gender of a counterpart, the timing of meetings, and whether potential partners have a reputation for harassment. Using both incentivized and hypothetical discrete choice experiments (DCEs) with 903 female entrepreneurs in Addis Ababa, Ethiopia, we find that women are willing to accept lower profits to work with other women, meet during the day, and avoid counterparts known for harassing behavior. These preferences cannot be explained by expectations of higher productivity and are consistent with broader patterns of business behavior. Survey data confirm the prevalence of harassment and the relevance of these trade-offs: many women report modifying their business strategies to avoid unsafe interactions, including rejecting clients, accepting lower payments, or rescheduling meetings. Taken together, our findings suggest that gender, timing, and harassment concerns act as non-monetary constraints that may distort business choices and reduce profitability. These trade-offs underscore the importance of addressing social and safety constraints in female entrepreneurship.