This article explores the culture-regulations-gender triad in relation to small and medium enterprises’ (SMEs’) performance. Using a firm-level panel dataset drawn from 27 countries in Central and Eastern Europe and Central Asia between 2005 and 2014, we show that women and men experience and respond differently to regulations. Women take regulations very seriously and as a result, their SMEs see improved performance, whereas men discount the influence of regulations which then depresses the performance of their SMEs. However, when women respond to regulatory enforcers, it erodes the performance of their SMEs, whereas when men engage enforcers, the performance of their SMEs improves. The fact that women and men experience and respond to the same regulations differently—regardless of country effect and whether their SMEs are high- or low-performing businesses—suggests that regulations perpetuate gender biases, thus impacting not only individuals but even the organizations they lead. Our study expands gendered institutions theory by clarifying how regulations diffuse cultural values and influence women and men, as well as their SMEs, differently.
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In the US, the misbehaviors of big enterprises (e.g., the Enron debacle in 2001) resulted in the creation of the Sarbanes-Oxley (SOX) regulation, which entails massive accounting fees that large firms can afford but can overwhelm SMEs.
Women, Business and the Law, 2016. http://pubdocs.worldbank.org/en/555061519930693642/WBL2016-Key-Findings-EN.pdf (accessed May 5, 2020)
We make no reference at all to unlawful acts; bribery, blackmailing, and vigilantism are certainly important topics, but they fall beyond the scope of this study (cf. Cuervo-Cazurra 2008).
BEEPS is a joint project of the European Bank for Reconstruction and Development (EBRD) and the World Bank. The dataset covers 2002, 2005, 2007–2009, and 2014, and not all variables are available in all time periods.
Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Uzbekistan, and Ukraine. We dropped Turkey from our sample as it had been a market economy long before the 1990s.
The survey samples were constructed through the stratified random sampling of national registries of firms or their equivalents. The firms were drawn from both the industry and service sectors; the distribution between these sectors was determined according to their relative contribution to the GDP of each country. Firms that operated in sectors subject to governmental price regulations and prudential supervision (banking, electric power, rail transport, and water and wastewater), enterprises with more than 10,000 employees, and firms established after 2002 were excluded from the sample. About three quarters of the firms sampled were SMEs.
This dataset provides information on family, work, environment, perceptions of life, politics, society, religion and morality, and national identity (Europeanvaluesstudy.eu, accessed May 5, 2020).
We also tested regulatory measures such as business inspections, certification, and tax filing; however, given their redundancy—and to declutter the tables—we decided to omit them.
The difference-in-means analyses, the inclusion of alternative measures of regulation (i.e., inspections, tax filing) and of course the robustness tests are all available upon request.
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We are deeply grateful to SBE’s guest editors Tatiana Manolova and Amanda Bullough, and two developmental reviewers for providing insightful feedback and asking thoughtful questions—your engagement assisted tremendously with the development of this manuscript.
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Vershinina, N., Markman, G., Han, L. et al. Gendered regulations and SME performance in transition economies. Small Bus Econ 58, 1113–1130 (2022). https://doi.org/10.1007/s11187-020-00436-7