Entrepreneurship against the tide : Business performance of women entrepreneurs in a constrained environment. A survey in Bangladesh

Abstract

Stimulating women’s entrepreneurship is widely seen as a vital way of enhancing their family livelihoods especially in developing countries. The enhancement of their family livelihoods is dependent on their business performance. The literature has focused on entrepreneurial orientation (EO) and social capital (social ties and networks) leveraging business performance. This however can be hampered in a constrained context, defined as a home based, resource scarce, socially confining and business wise threat-to-disrupt environment where women entrepreneurs (in developing countries) execute their businesses. This thesis enters into this debate offering a view on a specific developing country, Bangladesh. The main objective of this thesis is to explore the influence of EO and social capital on business performance of women entrepreneurs in a constrained environment and their contribution to family livelihoods. Empirical study is conducted based on the survey data collected from 292 women entrepreneurs in Bangladesh in 2015. The exploratory factor analyses show that innovativeness and pro-activeness jointly and risk-taking are the two dimensions of EO in the case of women entrepreneurs engaged in the handicraft business in Bangladesh. The results obtained from hierarchical multiple regression analyses suggest that the EO dimensions positively relate to business performance, but barriers in the social environment (for example, socio-cultural norms and customs) correlate negatively on it. In contrast, barriers in the business environment positively relate to business performance, suggesting that apparently, when being faced with risk, entrepreneurial women transform barriers into opportunities. Our findings from multiple regression models show that network size negatively relates to business performance of women entrepreneurs in Bangladesh. Also, the findings show that the number of bonding ties correlates negatively with business performance of Bangladeshi women entrepreneurs, while the number of bridging and linking ties are not significant. Based on in-depth analysis, our study offers an interesting new insight that a particular number of bonding ties of women entrepreneurs in Bangladesh relates positively with their business performance and beyond that, this relates negatively. Possibly Bangladeshi women entrepreneurs’ too extensive ties with family and relatives may create over-embeddedness in their network. Based on a multiple regression model, the study also shows that the number of strong ties is negatively related to business performance. In fact, this suggests that women entrepreneurs’ strong bonding- and bridging ties are not beneficial for their business performance in a traditional culture such as the Bangladeshi one. The results of a structural equation model suggest that financial capital and education level are antecedents positively influencing innovative- and pro-active EO of Bangladeshi women entrepreneurs, whereas their risk-taking EO is positively related to financial capital only. Next to women entrepreneurs’ EO, financial capital, business experience and business training drive their business performance. However, the findings suggest that among all drivers EO largely leverages their business performance in such a context. Furthermore, the study finds that women’s business performance in this context relates positively to their families’ livelihood. Apparently, the study suggests that Bangladeshi women’s EO, via its large positive impact on business performance, is at the root of their contribution to family livelihood. The findings of this study will help in decision making of policy makers and development partners or organizations (e.g. NGOs) who work for women’s entrepreneurship development in constrained conditions in developing countries.