Constraints and opportunities
facing women entrepreneurs
in developing countries
A relational perspective
Dima Jamali
Olayan School of Bussiness, American University of Beirut, Beirut, Lebanon
Abstract
Purpose – This purpose of the paper to examine the interplay of constraints and opportunities
affecting female entrepreneurship in developing countries. The paper integrates salient micro- and
macro-level perspectives and provides a rounded account of opportunities and constraints as part of a
holistic interdependent system.
Design/methodology/approach – The paper adopts an integrative multi-level research design and
an interpretive research methodology, capitalizing on in-depth interviews with ten women
entrepreneurs to explore their perceptions and interpretations of constraints and opportunities
facing female entrepreneurship in the Lebanese context.
Findings – The findings presented in this paper clearly illustrate the relevance of micro-, meso-, and
macro-level factors in entrepreneurship research and the usefulness of integrating multiple lens and
units of analysis to capture the complexity of the women entrepreneurship experience in any particular
context.
Originality/value – The value added of this research lies in adapting a framework recently
popularized in the context of diversity management for use in entrepreneurship research, helping to
capture in turn the dynamic interplay of multiple levels of analysis and objective/subjective factors
influencing female entrepreneurship.
Keywords Women, Entrepreneurs, Entrepreneurialism, Developing countries, Lebanon
Paper type Research paper
Introduction
Female entrepreneurship has attracted increasing attention in recent years in light of
concrete evidence of the importance of new business creation for economic growth and
development (Acs et al., 2005; Langowitz and Minniti, 2007). Not only does female
entrepreneurship contribute to economic growth and employment creation, but it is
increasingly recognized to also enhance the diversity of entrepreneurship in any
economic system (Verheul et al., 2006) and to provide avenues for female expression
and potential fulfillment (Eddleston and Powell, 2008). These benefits are rarely
leveraged in a systematic way, however, given that female entrepreneurship talent and
potential remain largely untapped in many contexts (Baughn et al. , 2006).
There is indeed accumulating evidence suggesting that although the rate at which
women are forming businesses has increased significantly, the rates of female
entrepreneurial activity are significantly and systematically lower than those for males
(Minniti et al., 2005; Verheul et al., 2006; Langowitz and Minniti, 2007). Minniti et al.
(2005) document in this respect substantial variations in entrepreneurship rates across
The current issue and full text archive of this journal is available at
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24,4
232
Received 25 September 2008
Revised 29 December 2008
Accepted 5 January 2009
Gender in Management: An
International Journal
Vol. 24 No. 4, 2009
pp. 232-251
q Emerald Group Publishing Limited
1754-2413
DOI 10.1108/17542410910961532
countries participating in the Global Entrepreneurship Monitor (GEM) in 2004, with
men more active in entrepreneurship in all countries. Generally, countries with high
female entrepreneurial activity rates also tended to be characterized by high total
entrepreneurial activity rates (Verheul et al., 2006).
While the literature on female entrepreneurship has traditionally focused on the
micro-level, including an exploration of the distinctive characteristics of female and
male entrepreneurs in terms of motivation, personality traits, or experience for
example, or the features of their firms as in size, goals, access to capital, management,
and performance, more systematic attention has been accorded in recent years to the
influence of macro-level factors on entrepreneurship generally, and female
entrepreneurship specifically (Verheul et al., 2006; Baughn et al., 2006). However,
we believe that both sets of factors are important to provide a comprehensive
understanding of female entrepreneurship in a particular context, consistent with the
integrative multi-level research design advocated by Davidsson and Wiklund (2001)
and more recently by Bruin et al. (2007).
There is indeed little doubt that determinants of female entrepreneurship lie in a
complex interplay of micro-, meso-, and macro-level factors (Bruin et al., 2007). While
gender differences have indeed been documented at a micro-level in relation to
self-perception (Anna et al., 2000), opportunity recognition (Eckhardt and Shane, 2003),
decision-making styles (Baker and Nelson, 2005), and network structures/networking
behavior (McManus, 2001), there is an increasing realization that individual
orientations are enmeshed and molded by economic, legal, normative and societal
environments, supporting the thesis of entrepreneurship embedded-ness in specific
socio-cultural contexts (Bruin et al., 2007; Baughn et al., 2006). Individual orientations
are also closely intertwined with meso level factors, including prevailing
organizational processes, policies and practices. Single level conceptualizations may
thus prove to be simplistic, failing to capture the interplay among different units and
levels of analysis.
It is precisely in this context that we seek to explore opportunities and constraints
facing women entrepreneurs in developing countries, using a relational multi-level
framework design as recently suggested by Syed and Ozbilgin (in press) in the context
of diversity management. After a brief overview of the literature pertaining to female
entrepreneurship, integrating salient micro-, meso-, and macro-level perspectives,
the paper presents an exploratory study documenting the perceptions of a sample of
Lebanese women entrepreneurs of different factors affecting the establishment and
development of their small business. While particular attention is accorded to
perceptions of micro and macro-level factors influencing female entrepreneurship in
transition economies, we also integrate insights into the salience of meso level factors
as appropriate and highlight the study’s implications for future directions in women
entrepreneurship research.
Factors affecting femal e entrepreneurship
The most popular themes in entrepreneurship research have traditionally revolved
around micro-level factors including opportunity recognition, motivation, financing
and performance. Opportunity identification is considered a mainstream fundamental
issue in entrepreneurship research, given that it is an important entrepreneurial
capability and a source of competitive advantage (DeTienne and Chandler, 2007).
Constraints and
opportunities
facing women
233
Gender differences in opportunity identification have been linked to differences in
human capital variables including education and work experience, with men
documented to leverage significantly higher levels of prior industry or entrepreneurial
experience as well as experience in managing employees than women (Carter and
Brush, 2005; Carter and Williams, 2003; Boden and Nucci, 2002). While men and
women may indeed have unique and differentiated stocks of human capital as recently
implied by DeTienne and Chandler (2007), the evidence generally suggests that women
have less human capital to bring to self-employment which negatively impacts their
opportunity identification and exploitation potential.
The motives for pursuing entrepreneurship have also received systematic attention,
with various authors referring to gender inequality as a push factor for female
entrepreneurship in developed and developing economies (Aidis et al., 2007; Baughn
et al., 2006). In other words, for many female entrepreneurs, the choice of
self-employment may reflect the restricted structure of opportunities in the labor
market, labor market discrimination or glass ceiling career problems, with
self-employment often perceived as a survival strategy, or as a means of providing
flexibility in work scheduling and reconciling multiple roles (Baughn et al., 2006). Pull
factors are also important revolving around opportunities for independence, challenge,
initiative as well as the success and satisfaction derived through entrepreneurship
(Hughes, 2003; Baughn et al., 2006), with research suggesting different sets of career
satisfiers for men and women entrepreneurs, revolving around status attainment for
the former and social relationships and goals for the latter (Eddleston and Powell,
2008).
In relation to financing, the evidence generally reveals that female entrepreneurs
start with lower levels of overall capitalization and lower ratios of debt finance than
their male counterparts (Bruin et al., 2007). Carter and Kolvereid (1997) found for
example that women had greater limitations in accessing personal savings, given more
punctuated and interrupted work histories and lower patterns of remuneration. Shaw
et al. (2001) similarly suggest that women are less likely to have generated a credit
track record to establish formal credit worthiness than their male counterparts. Female
entrepreneurial ventures also tend to be concentrated in service sectors that are usually
cheaper and easier to establish (Carter et al., 2001) and both male and female
entrepreneurs tend to tap mostly into savings and family support (Cosh and Hughes,
2000). Hence, there have been various associations between gender disadvantage and
funding, often characterized as chronic gender related under-capitalization barriers
(Marlow and Patton, 2005; Carter et al., 2001), which in turn lead to long-term under
performance.
Consequently, it should come as no surprise that women-owned businesses tend to
be smaller, slower growing and less profitable than those owned by men (Greene et al.,
2003). Objective performance measures have traditionally been used in the context of
female entrepreneurship, including turnover and employment growth, and only
recently have those been complemented by attention to outcomes other than financial
measures, including self-stated growth and the interdependence between performance,
success and personal goals (Bruin et al., 2007). Gender is considered to play a role in new
venture performance, given that it influences the self-perception of women
entrepreneurs and their abilities to realize business growth in a particular
environment (Bruin et al., 2007). Performance and growth are also certainly affected
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by prevailing role expectations, the nature and extent of family support, as well as
family and household responsibilities. Hence, performance in the context of female
entrepreneurship is recognized as a complex construct, affected by various antecedents
and extraneous factors.
The literature review has thus focused to this point on micro-level factors affecting
female entrepreneurship, including opportunity identification, motivation,
resources/financing strategies, and performance. However, the complex interweaving
and entanglement of micro-, meso-, and macro-level variables can be clearly detected
even as we tried to set a distinction between these levels. For example, human capital
constraints or push factor type motivations are inextricably linked to organizational
processes or labor market constraints as well as various macro normative and
socio-cultural variables. Similarly, performance and growth as indicated above are
affected by societal role expectations and availability of support. Self-perception and
desire for growth are in turn invariably influenced by the status, desirability and
credibility society attaches to women employment, self-employment and business
success. Hence, micro-, meso-, and macro variables interweave to shape the general
experience of female entrepreneurship in any specific context.
Some literature has accorded attention to macro-level variables specifically;
differences in rates of entrepreneurial activity across countries detected in the GEM
studies for example suggest that start-up rates are indeed molded by peculiar
structural characteristics of a given country (Reynolds et al., 2003). Baughn et al. (2006)
note that the level of entrepreneurial activity can be seen as embedded in a country’s
economic, socio-cultural and legal environment. Arenius and Minniti (2005) propose
grouping macro-level factors influencing entrepreneurship into two categories
including socio-economic factors and contextual factors and to supplement those
with micro-level perceptual factors. Verheul et al. (2006) have also recently investigated
macro-level determinants of entrepreneurship including technological development,
economic factors, demographic factors, government intervention and cultural factors,
documenting the significant effects of per capita income on entrepreneurial activity.
Institutional environments have thus been accorded more systematic attention in
recent literature.
Institutional theory has been specifically singled out as a fruitful theoretical lens in
the context of female entrepreneurship research (Baughn et al., 2006). Drawing on
institutional theory, Scott (1995) enumerates salient regulative and normative pillars of
institutions, which promote stability and predictability in social behavior, through
compliance with codified laws in the case of the former vs conformity or
appropriateness in the case of the latter. North (1990) refers to those two pillars as
the visible vs invisible rules of the game, respectively. In relation to female
entrepreneurship, the normative pillar is particularly salient in the sense that career
choices are clearly shaped by what society deems desirable and correct for one sex and
that many societies continue to define women through roles associated with family
responsibilities (Achtenhagen and Welter, 2003; Welter et al., 2003). Moreover,
traditional male stereotyping of entrepreneurship may discourage women from
pursuing new ventures (Bird and Brush, 2002). Differences in the social acceptability of
female entrepreneurs have also been noted as salient across institutional environments
(Reynolds et al., 2003), with lower credibility and legitimacy ascribed to female
entrepreneurship risking to constrain the rates of female start-ups (Baughn et al., 2006).
Constraints and
opportunities
facing women
235
As suggested by Verheul et al. (2006), entrepreneurship is also related to the level of
economic development and is embedded in a specific national economic context. For
example, high levels of self-employment are often reported in countries with low levels
of economic development (Baughn et al., 2006). Similarly, the evidence tends to suggest
that increasing economic prosperity is associated with decreasing rates of
self-employment (given the increased attractiveness of wage employment as well as
the opportunity cost of self-employment), although this may not apply to the most
prosperous countries (Nooderhaven et al., 2004). Accumulated data through the GEM
project indeed support the existence of a curvilinear relationship between GDP and
entrepreneurial activity, with the highest levels of activity reported in less prosperous
nations (motivated by push factors) and the lowest levels of entrepreneurial activity
reported in the middle income nations (Acs et al., 2005; Baughn et al., 2006).
Hence, there is little doubt that female entrepreneurship is affected by a complex
blend of micro-, meso-, and macro-level variables, although this has not been
systematically accounted for in previous research (Ahl, 2006; Bruin et al., 2007).
According to Bruin et al. (2007, p. 334) “most researchers take the current units of
analysis – the entrepreneur, the co-preneur, or the venture – for granted, without
questioning its applicability to women’s entrepreneurship.” It is precisely in this
context that we recommend moving away from single level conceptualizations to a
multi level relational framework or design as recently suggested by Syed and Ozbilgin
(in press) in the context of diversity management. As illustrated in Figure 1, the
relational framework bridges micro-individual, meso-organizational and
macro-national levels of analysis, helping to place and understand phenomena in
their peculiar macro national and historical contexts.
Adapting the relational framework to the study of entrepreneurship, there is a need
to understand the reciprocal influences and interplay of three sets of factors in
Figure 1.
A relational framework for
entrepreneurship research
Meso-
organizational
level
Source: Adapted from Syed and Ozbilgin (in press)
Micro-
individual
level
Macro-national level
Historical
context
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