Is It Equally Difficult for Female Entrepreneurs to Start Businesses in All Countries

Abstract

Do men and women face the same environmental conditions for business start-up across different countries? A large body of literature now explains that organizations face different environments as measured by differences in resources, technology, information, and external relationships (Tsai, MacMillan, and Low 1991). Moreover, environmental differences are perceptual as well as objective, and business people act in response to the perceptual environment (Tosi, Aldag, and Storey 1973; Tsai, MacMillan, and Low 1991). Little work has examined how perceptions of the environment influence business formation of male and female entrepreneurs across countries. While the organizational theory literature has identified four characteristics of organizational environments relevant to venture formation: munificence, resource availability, hostility, and uncertainty (Tsai, MacMillan, and Low 1991), no one has investigated whether these environmental characteristics are perceived differently by male and female entrepreneurs. Nor do we know whether these perceptions differ between male and female entrepreneurs across countries. There is evidence that these characteristics influence entrepreneurs in general. Environmental munificence, which measures the worth of the venture opportunity, encourages business formation (Covin and Slevin 1989, Dandridge 1982). Resource availability, which reflects the presence of labor, capital, and market demand, increases venture success (Cooper and Dunkelberg 1981; Dubini 1989; Holt 1987; Olofsson, Petterson, and Wahlbin 1986; Freedman 1983; Dandridge 1982). Environmental hostility, which reflects the fierceness of competition, discourages new venture formation (Covin and Slevin 1989, Holt 1987), and the uncertainty of the business environment inhibits business formation (Bull and Winter 1991, Bearse 1982). However, most of this research has been carried out in the United States using samples of predominantly male entrepreneurs. A small body of literature suggests that these environmental factors are perceived differently by male and female venture initiators. Female venture initiators have more trouble getting access to capital (Hisrich and O'Brien 1981, Collerette and Aubry 1990) perhaps because of a lack of confidence shown by banks, suppliers, and clients (Schwartz 1975, Lee-Gosselin and Grise 1990). They find it more difficult to get business training (Hisrich and Brush 1984; Knight and Gilbertson, forthcoming; Lee-Gosselin and Grise 1990) and have more trouble attracting qualified labor (Knight and Gilbertson, forthcoming). No research has yet examined perceptions of the business start-up environment across countries. However, unemployment rates, distribution of labor skills, rates of economic growth, availability of capital, interest rates, sources of capital, and proximity of producers and customers all vary from nation to nation. While within nations, environmental influences on business formation vary by location (Denison and Alexander 1986). If perceptions of the environment vary by country, there is a clear need to control for this effect in cross-national research. HYPOTHESIS AND METHODOLOGY The hypothesis tested here is: Controlling for the effect of country, do female entrepreneurs perceive the business start-up environment to be characterized by greater resource scarcity, turbulence, hostility, and uncertainty than do male entrepreneurs? Survey Instrument This study is part of a Society for Associate Researchers in International Entrepreneurship (SARIE) project on new business formation started in 1986. At that time, an international group of researchers collected data from 2,278 venture initiators and 1,733 nonventure initiators in 14 countries. In 1989, the research group decided to develop an abbreviated and improved version of the original questionnaire, aimed at the development of a new international database. This database was developed to look at the performance, growth, and characteristics of new ventures across national boundaries. …

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