Is gender an impediment to firm performance? Evidence from small firms in Mauritius

Abstract

Purpose The purpose of this paper is to test the female entrepreneurship underperformance hypothesis using a sample of small firms. The paper also attempts to explain why gender matters in entrepreneurship. The paper specifically investigates the differences in turnover of female and male entrepreneurs and also examines the reasons behind this differential performance by accounting for the gender factor. Design/methodology/approach This study uses survey data on 256 male and female entrepreneurs from the Island of Mauritius. The survey allows for the examination of the performance differential across male- and female-owned small businesses. The paper uses ordinary least squares and logistic estimation techniques to investigate the underperformance of female entrepreneurs. Sensitivity analyses are also undertaken to ensure robustness of the results. Findings The study finds evidence that gender matters when comparing the performance of male- and female-owned businesses. The results reveal that access to finance is an important hindrance to the performance of these small firms. Furthermore, the study also reveals that ethnicity plays a major role in influencing firm performance. Originality/value This paper is among the few studies, which investigates the female entrepreneurship underperformance hypothesis in a small developing state context and also attempts to explain the reasons why gender matters. The paper is an important empirical contribution to the literature in an African context.