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.
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Notes
They use Enterprise Data from 28 North and Sub-Saharan Africa countries surveyed between 2002 and 2006.
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.
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).
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.
More details on the methodology and access to the data is available at: www.enterprisesurveys.org.
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.
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.
See Aterido et al. (2011) for more details on the results of the management quality survey.
There is also information on whether the mother was an entrepreneur, but the results were too limited in scope to use.
See Aterido et al. (2011).
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.
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.
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.
(1) General entrepreneurial characteristics; (2) entrepreneur background; (3) ‘how’ the entrepreneur acquired the business; (4) what motivated the entrepreneur to acquire the business.
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.
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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
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DOI: https://doi.org/10.1007/s11187-011-9375-y
Keywords
- Entrepreneurial characteristics
- Gender productivity gap
- Sub-Saharan Africa
- Entrepreneurship
- Women entrepreneurs