The role of women in economic development cannot be understated. Jiggins (1989) notes that about 30 per cent of rural households in the world are headed by women, and that women contribute about 80 per cent of agricultural labour, produce almost 60 per cent of the food that is consumed by rural households and generate more than one-third of; ill household incomes, mainly through small-scale agro-industry, trading, craft work and casual labour. In Malawi, about 59 per cent of female proprietors said 50 per cent or more of Iheir household income came from their enterprises (Daniels &Ngwira,

1993). Concern about women's participation in economic development is relatively new.

Lele (1986) notes that the frequently debated questions are whether women have adequate opportunities to participate in the productive processes or whether they arc just beasts of burden, the primary victims of exploitation. However, Heilbrunn (2004) asserts that, over time, the numbers of female-owned businesses all over the world have been rising, and that in the past decade women have begun to be recognised as successful entrepreneurs.

The micro and small enterprises (MSEs) sector plays an important role in Malawi. The official definition of an MSE is based on employment and annual turnover (Government of Malawi. 1999). Micro enterprises employ up to four persons and have a turnover of up to MWK0.12 million, while small enterprises employ between six and 20 persons and have a turnover of between MWK0.I2 million and MWK4 million. (The exchange rate in August 2007 was MWK139.5 — US$1.) In 1992 it was estimated that there

were 587 283 MSEs generating about 1.07 million self-employment and paid employment opportunities. In 2000.there were 557 848 MSEs, now generating 1.01 million of these opportunities (Ebony Consulting International & National Statistical Office I

Associate Professor of Economics. Department of Economics, Chancellor College, Universily of Malawi, Zomba. This study was funded by the Organisation of Social Science Research in East and Southern Africa (OSSREA). Addis'Ababa, Ethiopia, under the 15lh OSSREA Gender Issues Research Competition Granl.for which the author acknowledges the financial support.

The author also acknowledges the comments from two anonymous referees. However, the author fakes sole responsibility for any remaining errors. 

The decrease in the number of MSEs is attributed to the high closure rates among small enterprises, with HIV/AIDS exacerbating this. However, the role of women in MSEs has significantly improved in Malawi. At independence, the economy was dominated by Europeans specialising in manufacturing and Asians specialising in commerce. In the post-independence era there have been many policy changes, and these have contributed to the development of local and female entrepreneurship. In a study of small and agro-business enterprises in 1987, it was found that only 7 per cent of the sampled enterprises were owned and operated by women (Malawi/United States Agency For International Development. 1987). However, the increasing importance of women in business enterprises was revealed in later studies. In the 1992 survey of micro, small and medium-scale enterprises, about 46 percent of proprietors in Malawi were women (Daniels &Ngwira, 1993). A recent Growth and Equity through Microenterprise Investments and Institutions (GEMINI) study further reveals that 34 percent of MSEs were owned by women, 35 per cent by men and 30 per cent by married couples ( EG & NSO, 2000). Because of its potential for reducing poverty, the MSE

sector is receiving increased focus in development policies. In the Malawi Poverty Reduction Strategy Paper, it is singled out as one of the sectors that could achieve proper growth in which women will play a significant role (Government of Malawi, 2002).

The paper is organised as follows. The next section outlines the problem statement and research questions. Section 3 reviews literature on the relation between gender and business performance. Section 4 outlines data sources and specifics a model for the relationship between enterprise performance and gender while controlling for other variables, and Section 5 reports and discusses the empirical results. Section 6 provides concluding remarks, and the final section presents policy implications and recommendations.