Do women and men entrepreneurs face different constraints in managing their businesses? Table 2 indicates for selected constraints, separately for men and women, the percentage of entrepreneurs who are more likely to complain that a specific constraint represents a “major”
or “very severe” obstacle for the operation and growth of their enterprise. Some constraints tend to be more closely associated with women entrepreneurs. For example, corruption is identified as a “major” or “very severe”
constraint by female-owned enterprises somewhat more frequently than by male-owned enterprises, while the reverse is the case for labor regulations.
However, although there are differences in their perceptions about the severity of an obstacle, there is no clearly discernible gender-distinct pattern in either the nature of the constraint (that is, there is no obstacle that women find systematically more severe than men in all countries) or the country (that is, there is no country where women are systematically more likely than men to complain about all obstacles) in which the entrepreneur operates.
Unfortunately, small sample sizes—especially for the sample of women entrepreneurs—again limit in many cases the possibility of testing whether the difference between female and male entrepreneurs is significant, and to draw firm conclusions.
A related but important question is whether the differences between women and men entrepreneurs is due to gender rather than to other factors, such as the size of the enterprise or the sector within which the enterprise operates.The answer is “Yes”—to some extent.
After accounting for the fact that enterprises of different size and age, and that are operating in different sectors and geographical locations, can be affected differently by the severity of business constraints, we still observe some differences between men and women entrepreneurs in their judgment about the severity of a given constraint. Figure 3 shows predicted probabilities of complaining about an obstacle being “major” or “very severe” for a man and a woman entrepreneur with fixed characteristics—that is, similar in all respects except for their sex.12 The results are shown for 6 of the 18 constraints identified in the Enterprise Survey questionnaire—these are the constraints that are usually indicated as more binding and critical for women than for men, such as corruption and access to finance.
Women and men entrepreneurs do differ in their perceptions of business constraints, after controlling for the most important observable characteristics. Again, however, there is no consistent pattern across countries and constraints.
In some countries, men are more likely than women to report a constraint as “major” or “very severe”; in other countries the opposite holds—even when looking at the same type of constraint. In several cases, men and women entrepreneurs agree on the severity of a constraint. No constraint appears to be a “female-type” of constraint, that is, one overwhelmingly suffered by women. Corruption, for example, is, along with access to finance, a constraint that one would expect women to be more likely to complain about than others.
As shown in Figure 3b, in Mozambique, Senegal, and Zambia, women are more likely than men to judge corruption a “major” or “very severe” obstacle, but in Angola, Benin, Egypt, Malawi, and Mali, men are much more likely to complain about corruption.
Access to finance appears to be as much a male problem as it is a female one. If women are more likely to indicate this constraint as “major” or “very severe” in Burundi, Eritrea, Kenya, Lesotho, and Madagascar, men identify this more as a constraint in Angola, Mauritania, and Tanzania. Figure 3 reveals a very clear positive correlation—in countries where the probability of a woman considering an obstacle “major” or “very severe”
is higher, the probability of men complaining about the same obstacle to the same degree is also higher. So, for example, corruption is clearly a problem for both men and women in Egypt and Kenya, access to finance in Guinea-Bissau and Cameroon, and tax administration in Cameroon and Kenya.
Some issues appear to be more severe than others—access to finance is in general clearly felt as a more problematic constraint than labor regulations.
International research in other regions indicates that a lower level of confidence, a greater fear of failure, and the lack of role models may be preventing some women from entering into business ownership in the first place.
In interviews conducted as part of the 2006 Global Entrepreneurship Monitor surveys in 40 countries, fewer adult women than men interviewed feel that they “have the required skills and knowledge to start a business”: 41 percent of women in low- or middleincome countries compared with 50 percent of men, and 33 percent of women in high-income countries compared with 46 percent of men.These gender differences disappear among the women and men interviewed who actually own enterprises, with over three-quarters of male and female respondents saying they have the required knowledge and skills.
Likewise, women who are not business owners are more likely than men to agree that “fear of failure would prevent me from starting a business” (40 percent compared with 33 percent in low- or middle-income countries and 44 percent compared with 39 percent in high-income countries) and, again, gender differences disappear among the active business owners interviewed.13 The lack of role models is another constraint to women’s entrepreneurship, but one that appears to be diminishing with time. Among the adult women interviewed for the 2006 Global Entrepreneurship Monitor study, just 35 percent in low- or middle-income countries and 27 percent in high-income countries personally know someone who has started a business.That share increases to 53 percent and 47 percent, respectively, among established business owners (those who have been in business for more than 42 months), and it is even higher for newly established businesses—61 percent of women in low- or middle-income countries and 56 percent of women in high-income countries.14 Consequently, familiarity with someone involved in entrepreneurship is positively correlated with becoming an entrepreneur, and it appears that there are now more such role models for women getting into business today than even in the recent past.These factors all affect selection into entrepreneurship at the outset, and help to explain why, once already engaged in entrepreneurial activity, differences based on gender seem to become less immediately relevant.
The results derived from the Enterprise Survey data presented here need to be interpreted with caution.
First, sample sizes are small. Second, there are missing observations that are likely not to be random and therefore are likely to affect the results. For example, entrepreneurs who have a strong feeling about a constraint being severe may be more likely to answer the question (or vice versa).This selection effect on the missing values may be different for men and women.Third, these results reflect perceptions, not objective measures of the constraints identified.
Finally, the severity of the constraints is assessed by entrepreneurs already in business—
therefore these constraints are perceived in relation to how they affect the firm’s operations, not its startup. It may be that women are affected more than men by specific constraints at the startup stage, so that they are not able to enter into business, but this is not amenable to analysis through the Enterprise Survey data.
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