Gendered regulations and SME performance in transition economies

Abstract

This article explores the culture-regulations-gender triad in relation to small and medium enterprises’ (SMEs’) performance. Using a firm-level panel dataset drawn from 27 countries in Central and Eastern Europe and Central Asia between 2005 and 2014, we show that women and men experience and respond differently to regulations. Women take regulations very seriously and as a result, their SMEs see improved performance, whereas men discount the influence of regulations which then depresses the performance of their SMEs. However, when women respond to regulatory enforcers, it erodes the performance of their SMEs, whereas when men engage enforcers, the performance of their SMEs improves. The fact that women and men experience and respond to the same regulations differently—regardless of country effect and whether their SMEs are high- or low-performing businesses—suggests that regulations perpetuate gender biases, thus impacting not only individuals but even the organizations they lead. Our study expands gendered institutions theory by clarifying how regulations diffuse cultural values and influence women and men, as well as their SMEs, differently.