Skip to main content

Advertisement

Log in

Whose business is it anyway?

Closing the gender gap in entrepreneurship in Sub-Saharan Africa

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

This article examines how gender may account for productivity gaps across enterprises. First, using data from six countries in Sub-Saharan Africa, the article demonstrates that the extent and significance of any productivity gap by gender depends critically on the criteria used to classify an enterprise. Using a definition of ‘female participation in ownership,’ there are few differences in average performance measures. However, a 12% productivity gap emerges when a tighter definition, based on decision-making control, is used. Second, the article examines which entrepreneurial characteristics (education, management skills, experience and the motivation for being an entrepreneur) are most associated with higher productivity. The findings reveal that there are some gender gaps in the prevalence of these characteristics, but that these do not account for the overall gender productivity gap. Rather, while women benefit as much as men from education and management skills, there are non-linear impacts by gender in the benefits of having a family background in entrepreneurship; sons rather than daughters benefit from having a father that was an entrepreneur or from joining a family enterprise.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

Notes

  1. They use Enterprise Data from 28 North and Sub-Saharan Africa countries surveyed between 2002 and 2006.

  2. This result, that an increase in access to credit is more likely to lead to an expansion of male- than female-run firms, has been found in other countries (e.g. Kevane and Wydick 2001; Coleman 2007; de Mel et al. 2009; Sabarwal and Terrell 2008). As an extension, in this paper, we examine potential differences in the investment climate by gender. Preliminary results support this finding; using the narrower definition of gender by control, women-led firms appear to be less sensitive to expanding access to finance.

  3. The question on decision-making authority was asked in six countries. The larger gender module was asked in five countries (i.e., not in South Africa).

  4. It is possible that reverse causation is at work, i.e., that men are willing to let the women run businesses if they is not too successful, but if they becomes successful, then the man takes control. However, there is no evidence of such a process being widespread as most entrepreneurs indicate they have been in their position of decision-maker for years.

  5. More details on the methodology and access to the data is available at: www.enterprisesurveys.org.

  6. In light of these findings and supporting ones found in Nigeria that also asked more detailed questions about decision-making roles, the questionnaires for 2009 now ask survey participants for information on firm ownership as well as decision-making powers.

  7. Bloom and Van Reenen (2007) built measures of the frequency of its use into each indicator and assessed how participatory the practice was. Our measures give higher scores for more frequent use of the practice. However, we decided to separate the participatory nature of the practice and to test for its influence on business outcomes directly.

  8. See Aterido et al. (2011) for more details on the results of the management quality survey.

  9. There is also information on whether the mother was an entrepreneur, but the results were too limited in scope to use.

  10. See Aterido et al. (2011).

  11. The distinction does not matter for the sole proprietorships, but it does for partnerships and limited liability companies. There are 17 limited liability companies in which the primary owner does not have a majority stake in the firm, with the lowest share equal to 20%. Exclusion of these 17 firms from the analysis does not change the results.

  12. The decomposition was repeated, including the larger set of entrepreneurial characteristics that were significant in the regression analysis. The results are extremely similar and so not reported again.

  13. Many of the entrepreneurs they examine are own-account or self-employed workers who do not have paid employees or an enterprise that exists beyond themselves. We do not include these enterprises in the sample frame, but look at enterprises with employees, so there are multiple individuals involved with the enterprise, and there can potentially be multiple owners.

  14. (1) General entrepreneurial characteristics; (2) entrepreneur background; (3) ‘how’ the entrepreneur acquired the business; (4) what motivated the entrepreneur to acquire the business.

  15. It is noted that there can be endogeneity concerns with this specification, that the decision to register could affect some of the subsequent dependent variables (e.g., size) of the enterprise and could be associated with a survivor bias. However, as most of the controls would have been the same at the time of the start-up, we feel the associations are still of interest.

References

  • Aterido, R., Hallward-Driemeier, M., & Pages, C. (2011). Big constraints to small firms’ growth? Business environment and employment growth across firms. Economic Development and Cultural Change, 59(3), 609–648.

    Article  Google Scholar 

  • Bardasi, E., & Sabarwal S. (2009). Gender, access to finance, and entrepreneurial performance in Sub-Saharan Africa. Mimeo. Washington, DC: World Bank.

  • Bardasi, E., Blackden, C. M., & Guzman, J. C. (2007). Gender, entrepreneurship, and competitiveness in Africa. The Africa Competitiveness Report. Washington, DC: World Bank.

    Google Scholar 

  • Bertrand, M., & Schoar, A. (2006). The role of family in family firms. Journal of Economic Perspectives, 20, 73–96.

    Article  Google Scholar 

  • Bertrand, M., Johnson, S. H., Samphantharak, K., & Schoar, A. (2004). Mixing family with business: A study of thai business groups and the families behind them. Mimeo. Washington, DC: MIT. Available at: http://ssrn.com/abstract=687299.

  • Bloom, N. & Van Reenen J. (2007). Measuring and explaining management practices across firms and countries. Quarterly Journal of Economics, 122(4), 1351–1408

    Google Scholar 

  • Bosma, N., van Praag, M., Thurik, R., & de Wit, G. (2004). The value of human and social capital investments for the business performance of startups. Small Business Economics, 23, 227–236.

    Article  Google Scholar 

  • Coleman, S. (2007). The role of human capital in the profitability and growth of women-owned small firms. Journal of Small Business Management, 45(3), 303–319.

    Article  Google Scholar 

  • Davis, S. J., & Haltiwanger, J. C. (1992). Gross job creation, gross job destruction and employment reallocation. Quarterly Journal of Economics, 107, 819–863.

    Google Scholar 

  • Davis, S. J., & Haltiwanger, J. C. (1999a). Gross job flows. In: Handbook of labor economics, vol. 3. Orley A. & Card, D., Eds. Amsterdam: Elsevier Science, pp. 2711–2805.

  • Davis, S. J. & Haltiwanger, J. C. (1999b). On the driving forces behind cyclical movements in employment and job reallocation. American Economic Review, 89, 1234–1258.

    Google Scholar 

  • de Mel, S., McKenzie D. & Woodruff C. (2009). Are women more credit constrained? Experimental evidence on gender and microenterprise returns. Mimeo. Washington, DC: World Bank.

  • Devine, T. (1994). Changes in wage-and-salary returns to skill and the recent rise in female self-employment. American Economic Review, 84(2), 108–113.

    Google Scholar 

  • Djankov, S., Qian, Y., Roland, G., & Zhuravskaya E. (2006a). Entrepreneurship in China and Russia compared. Journal of the European Economic Association, Papers and Proceedings, 4(2–3), 352–365.

    Google Scholar 

  • Djankov, S., Yingyi, Q., Gerard, R., & Zhuravskaya, E. (2006b). Who are China’s entrepreneurs? American Economic Review, 96(2), 348–352.

    Article  Google Scholar 

  • Farlie, C., & Robb, A., (2009). Gender differences in business performance: Evidence from the characteristics of business owners survey. USC Working Paper. Santa Cruz, CA: University of California

  • Gatewood, E. G., Carter, N. M., Brush, C. G., Greene, P. G., & Hart, M. M. (2003). Women entrepreneurs, their ventures, and the venture capital industry: an annotated bibliography. Stockholm, Sweden: ESBRI.

    Google Scholar 

  • Hallward-Driemeier, M. (in press). Enterprising women: Expanding opportunities in Africa. Washington, DC: World Bank.

  • Hallward-Driemeier, M., & Hasan, T. (in press). Empowering women: Legal rights and economic opportunities in Africa. Washington, DC: World Bank.

  • Kalleberg, A., & Leicht, K. (1991). Gender and organizational performance: Determinants of small business survival and success. Academy of Management Journal, 34(1), 136–161.

    Article  Google Scholar 

  • Kepler, E., & Shane, S. (2007). Are male and female entrepreneurs really that different? The office of advocacy small business working papers.

  • Kevane, M., & Wydick, B. (2001). Microenterprise lending to female entrepreneurs: Sacrificing economic growth for poverty alleviation? World Development, 29(7), 1225–1236.

    Article  Google Scholar 

  • Klapper, L. & Parker, S. (2010). Gender and the business environment for new firm creation. World Bank Research Observer, pp. 1–21.

  • Lohmann, H., & Luber, S. (2004). Trends in self-employment in germany: different types, different developments. In R. Arum & W. Müller (Eds.), The re-emergence of self-employment dynamics and social inequality (pp. 36–75). Princeton, NJ: Princeton University Press.

    Google Scholar 

  • Loscocco, K., & Robinson, J (1991). “Barriers to women’s small-business success in the United States.” Gender & Society, 5(4):511–32.

    Google Scholar 

  • McPherson, M. (1996). Growth of micro and small enterprises in Southern Africa. Journal of Development Economics, 48: 253–277.

    Google Scholar 

  • Mead, D., & Liedholm, C. (1998). The dynamics of micro and small enterprises in developing countries. World Development, 26(1), 61–74.

    Article  Google Scholar 

  • Miniti, M. (2009). Gender issues in entrepreneurship. Foundations and Trends in Entrepreneurship, 5(7–9), 497–621.

    Article  Google Scholar 

  • Robb, A., & Wolken, J. (2002). Firm, owner, and financing characteristics: Differences between female- and male-owned small businesses. Federal Reserve Working Paper Series. Washington, DC: Federal Reserve

  • Sabarwal, S., & Terrell, K. (2008). Does gender matter for firm performance? Evidence from Eastern Europe and Central Asia. World Bank Policy Research Working Paper no. 4705.

  • Westhead, P., Storey, D., & Cowling, M. (1995). An exploratory analysis of the factors associated with the survival of independent high-technology firms in Great Britain. In F. Chittenden, M. Robertson, & I. Marshall (Eds.), Small firms: Partnerships for growth (pp. 63–99). London, UK: Paul Chapman Publishing.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Mary Hallward-Driemeier.

Additional information

The views expressed here do not necessarily reflect those of the World Bank, its Board of Executive Directors or the countries they represent.

Appendix

Appendix

See Table 8.

Table 8 Entrepreneur characteristics (by module) and performance

Rights and permissions

Reprints and permissions

About this article

Cite this article

Aterido, R., Hallward-Driemeier, M. Whose business is it anyway?. Small Bus Econ 37, 443–464 (2011). https://doi.org/10.1007/s11187-011-9375-y

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11187-011-9375-y

Keywords

JEL Classifications

Navigation