Abstract
Life in developing countries often relies on informal economy and micro-enterprises, often created and managed by women. Their performance has been studied in the literature of management and world development and factors of success have been suggested among which the access to micro-financing organizations, being member of network, having an innovative spirit and accepting the related risk and being able to overcome hostile business conditions. The difficulties are reported as being worst for women who suffers from stereotypes about their abilities and negative cultural factors. This chapter reports on a cross-sectional study among 200 entrepreneurs and test those hypothesis.
Top1. Introduction
1.1 Entrepreneurship, Startups and Women
Research on entrepreneurship often overlooks or minimizes women's roles in the innovation process and may even perpetuate gender bias (Chávez-Rivera et al., 2024). Despite these challenges, women entrepreneurs play a vital role in job creation and economic growth (Bullough et al., 2019). Studies suggest that women entrepreneurs excel in communication and often outperform men in business ventures (Gorbatai and Nelson, 2017). For instance, Neumeyer and Santos (2020) found that teams with a higher proportion of women tend to perform better in entrepreneurial endeavors, highlighting women's qualities such as controlled audacity, self-discipline, and effective communication skills.
Hughes (2017) found that only 10% of startups were founded by women, with many operating in sectors traditionally dominated by women and often opting for non-profit ventures over profit-seeking enterprises. Moreover, transformational leadership in charitable organizations is predominantly led by women in Canada (Alonzo et al., 2024). Gender disparities persist in science-related entrepreneurship, with women entrepreneurs facing significant challenges compared to their male counterparts (Poggesi et al., 2020). Personal characteristics influence women's career choices and entrepreneurial success (Kuschel et al., 2020), with studies showing fewer women commercializing their research and opting for less lucrative sectors compared to men (Abreu and Grinevich, 2017).
Entrepreneurial orientation significantly impacts enterprise growth and performance, as evidenced by research across multiple countries (Khadhraoui et al., 2019). However, women entrepreneurs face various constraints, including family responsibilities, low education levels, limited access to finance, and legal and policy barriers (Nyangarika, 2016). Addressing these challenges requires education and financial access for women, improvements in the business environment, and equitable distribution of household responsibilities. Politicians are increasingly recognizing the importance of female entrepreneurship and are allocating resources to support and promote it, particularly in Canada (Bosma, 2020). In Tanzania, women entrepreneurs face numerous constraints related to personal characteristics, lack of information, finance, and unfavorable legal and policy frameworks (Nyangarika, 2016). Overcoming these barriers requires interventions such as education, financial access, and improvements in the business environment.
Micro, Small, and Medium Enterprises (MSMEs) play a critical role in the Philippine economy, contributing significantly to employment generation and national wealth (Anoos et al., 2020). These enterprises are vital for economic development, enhancing purchasing power, and contributing to tax revenue.
1.2 Objective of This Chapter
The role of culture in women's entrepreneurship remains largely unexplored, despite its recognized influence on success or failure due to societal barriers such as values, beliefs, and local behaviors (Bullough et al., 2022). This chapter seeks to address this gap by examining the impact of gender, stereotypes, and cultural factors on women's entrepreneurship, particularly in the context of microfinance.
Firstly, it aims to enhance understanding of the challenges women face in entrepreneurship due to cultural norms and gender biases. Secondly, it intends to compare the performance of women entrepreneurs with that of men, focusing on informal economic activities. This approach draws inspiration from Tossou, Gueyie, & Couchoro's (2022) study on “Female Managers, Informal Enterprises, and Their Perceived Financial Performance in Togo,” which explores similar themes in a different context.
Key Terms in this Chapter
Driver: A driver is a factor that promotes progression and development in a project, relationship, or activity. Analogous to its meaning in vehicle operation, this concept refers to an organized method for achieving or succeeding in something. In business, drivers can be personal motivations (such as desire, hard work, perseverance), skills (self-confidence, interpersonal skills, leadership ability), or economic, political, and managerial factors more or less under the entrepreneur's control.
Stereotype: A stereotype is a widely held, unfounded belief about a person or group, often portraying “others” who are not members of the group in a negative light. Stereotypes are challenging to dispel and often revolve around factors such as gender, physical appearance, or religion. They are perpetuated by influential figures navigating conflicts. Recognizing and challenging stereotypes is essential, as they lack evidence and should not be accepted as truth.
Entrepreneurship: Entrepreneurship refers to the process of establishing a business, primarily for growth and profit, although it can also apply to social enterprises aimed at serving beneficiaries rather than generating profit. Entrepreneurs possess specific qualities such as opportunism, sound judgment, the ability to discern opportunities from scams and trends, resilience in the face of uncertainty and risk, and proficiency in acquiring and allocating resources—material, financial, and human—to achieve their business objectives.
Cultural Factor: A cultural factor encompasses the values, beliefs, attitudes, traditions, and behaviors inherent in a group or nation that shape its way of thinking, expressing, and reacting, consistent with the reference group. This can range from a small administrative unit within a company to an entire nation. These factors may not be consciously recognized by members of the community and may only manifest when encountering foreigners or unexpected situations. They are often more readily apparent to third parties.
Barrier: A barrier is an obstacle that can hinder physical movement or intellectual progress. Physical barriers, such as walls or pedestrian obstructions, impede physical movement, while intellectual barriers can stem from authoritative censorship or ignorance of fundamental principles. In the economic context, barriers may arise from a lack of funding or technological expertise, hindering entry into a particular industry. In the business realm, barriers may include shortages of skilled labor, permits, equipment, or bureaucratic hurdles. A primary cause of barriers for extremely small enterprises is often a lack of resources, particularly financial.
Constraint: In contrast to a barrier, a constraint is essentially a limitation on action imposed by circumstances (e.g., winter weather) or regulations (e.g., minimum wage laws), alleviated by resources, expertise, legal or bureaucratic decisions, or appropriate action. When used to coerce someone against their will, constraints can range from moral or physical coercion to outright violence.
Startup: A startup is a newly established company that leverages a competitive advantage in the market, whether through location, knowledge, product, or service. It may be founded by an individual, a group of individuals, or a more formal entity such as a cooperative or corporation. Some women gravitate towards low-capital startups such as sari-sari shops, artisanal crafts sales, house cleaning services, or childcare.