Firm performance variables provide policy makers, researchers and analysts with an objective way to analyze the constraints to the competitiveness of a country. The channels and the constraints that dictate firm performance are however not gender neutral: Female and male entrepreneurs may face, for example, different obstacles. By talking about gender, we are thus implicitly recognizing that the performance of a firm is linked to the decision maker and to the obstacles he or she faces in starting up and running a business.
In order to help with this process, the World Bank and U.S. Agency for International Development (USAID) Women’s Leadership in Small and Medium Enterprises (WLSME) Trust Fund has produced six modules on indicators measuring key determinants of successful women-led small and medium enterprises (SMEs) in developing countries.
The purpose of these modules is to identify a common set of questions to include in impact evaluation, and more general surveys, for measuring performance in small and growth oriented enterprises and potential gender gaps. Specifically, the modules provide a set of standardized questions for measuring core indicators of business outcomes, access to finance, business regulatory environment, human capital, non-cognitive skills, and agency that are relevant for a gender-disaggregated analysis.
As in other surveys, additional information from qualitative methods is also needed. Focus group discussions, for example, play an especially important role since gender gaps are context-specific. Similarly, questions should always be adapted to the context under analysis.
The Starting Point: Measuring Business Outcomes and the Entrepreneur
A good survey focused on entrepreneurship should allow researchers to clearly identify the decision maker and the individual characteristics of the entrepreneurs; it should also contain enough information to measure the determinants of the gender gaps. The focus of these modules is to provide good guidance questions on key dimensions.
The starting point of the analysis is the identification of business-related outcomes and the decision maker. Measuring profits for small enterprises identifies questions and indicators for measuring profits and key inputs for micro and small enterprises. It also proposes some question for identifying the decision maker. This is not a straightforward task. In the case of sole-proprietorship, the owner also tends to be the decision maker; however, this might not be the case in other types of corporations.
What Explains Gender Gaps: Key Dimensions and Variables
The remaining modules include questions for measuring potential input indicators, which help to understand the reasons behind gender performance gaps. These are illustrated below. The table shows the dimension (left-hand column) and the related variables (right-hand column) analyzed in these modules. Each module provides a discussion of these variables and their importance for analyzed gender gaps in firm performance.
| Understanding Gender Gaps in Firm Performance: Key Dimensions and Input Variables | |
|---|---|
| Modules/Dimensions | Variables |
| Access to finance | Usage of credit; bank accounts; constraints in accessing credit/financial services; financial literacy |
| Non-cognitive business-related skills | Self-efficacy, autonomy, risk propensity |
| Human capital | Generic human capital, experience, managerial and financial literacy |
| Agency | Time, safety, and participation in business networks |
| Business environment | Time for childcare (proxy for family care), corruption and sexual harassment, industry segregation by gender, property titling |