Abstract

۱ Introduction

۲ Background

۳ Theory development and hypotheses

۴ Methods

۵ Results

۶ Discussion

۷ Conclusion

References

Abstract

     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.

Introduction

     This study investigates the intersection of culture, regulations, and gender and the implications of this intersection for the performance of women-led small and medium enterprises (SMEs). Culture, regulations, and gender are of course distinct but, because they are highly intertwined and mutually reinforcing, it is difficult to unpack their discrete effects on individuals and firms. Culture reflects collective values and beliefs, regulations are overriding rules enforced by higher authorities, and gender influences our attitudes, assumptions, and norms of interactions. Although culture is a more subtle construct because it is anchored in tacit attitudes, mindsets, and societal norms, it does shape and is inextricably linked to and bounded by gendered values and regulations—a wider institutional net underpinned by authoritative governance principles. Being impalpable and lacking central governance, culture evolves autonomously and tacitly; however, like regulations and gender, it sets enduring codes of conduct and values, molds attitudes and actions, and it imprints guiding principles in relation to what is encouraged, accepted, discouraged, and/or rejected (Johnson 2000; Welter 2011). Thus, all three elements are visible and invisible “enforcement” mechanisms that influence choices and actions at the personal and organizational levels.

Conclusion

     All efforts made to close the gender gap in entrepreneurship research and practice will remain inadequate until we become fully aware that some regulations are not gender agnostic but, in fact, perpetuate gender bias. Based on data draw from 27 countries in Central and Eastern Europe and Central Asia from 2005 to 2014, our study explains why and how regulations are gendered and how women’s and men’s experience and responses to regulations influence their firm performance. We show that women’s and men’s experience of regulations is correlated differently with the performance of their SMEs—the former experience regulations as being positively related to their SMEs’ performance, whereas the latter experience them to be negatively correlated to their SMEs’ performance. In contributing to gendered institutions theory, our study shows that (i) regulations perpetuate gender inequality, and (ii) such gender effects supersede cultural differences and extend well beyond the individuals involved, spilling over into and impacting the wider organizations they lead.