Exports and Female Entrepreneurs: Foreign Influence and Domestic SME Exports

Introduction

There has been considerable debate about the impact that Foreign Direct Investment (FDI) has upon home grown enterprise (Pathak, Laplume, & Xavier-Oliveira, 2015). Theory suggests that both positive and negative mechanisms may be present, whilst different empirical studies find evidence of both a positive and negative overall effect. One particularly important relationship to consider is whether greater foreign business ownership in an area assists or restricts the exporting behaviour of domestic firms. Theoretically both relationships are possible with a negative relationship coming from competition for resources and markets (Brush, Edelman, & Manolova, 2002). A positive relationship on the other hand may be attributed to: improved productivity from technological and managerial spillovers (Blalock & Gertler, 2008; Del Giudice, Arslan, Scuotto, & Caputo, 2017; Del Giudice, Scuotto, Garcia-Perez, & Petruzzelli, 2018); positive selection of competitive domestic firms (Del Giudice, Scuotto, Garcia-Perez, & Petruzzelli, 2018; Kneller & Pisu, 2007); and experience selling to international companies (Barbosa & Eiriz, 2009). Empirical evidence has found both a positive (Thompson & Zang, 2016) and negative (Greenaway, Sousa, & Wakelin, 2004) relationship overall.

What has been examined less, however, is whether any relationship that is found is equally applicable to male and female entrepreneurs. Studies, such as Klapper and Parker (2011) have found differences in entrepreneurial engagement and firm performance for male and female run business, but others do not always find significant differences in male and female entrepreneurs’ propensity to export (Grondin & Schaefer, 1995; Westhead, Wright, & Ucbasaram, 2001). Others, however, suggest that for many female entrepreneurs factors such as traditional gendered roles in family life inhibit exporting ambitions (Welch, Welch, & Hewerdine, 2008). Other studies whilst not directly exploring gender have found a negative coefficient on any gender dummies included in calculations (Thompson & Zang, 2016).

This chapter explores the foreign influence domestic enterprise export relationship, but seeks to understand the role played by gender. It seeks to answer the following research questions: (1) do female entrepreneurs export less than their male counterparts?; (2) does foreign influence in the local economy affect the export behaviour of male and female entrepreneurs symmetrically?; (3) do the characteristics of male and female entrepreneurs lead to different foreign influence - domestic export relationships? By answering these questions this study provides entrepreneurs and policymakers with a more complete understanding of how policies to attract FDI impact on the export activities of domestic entrepreneurs, particularly the growing number of female entrepreneurs. The results provide policymakers with guidance on different policies to target particular male and female entrepreneurs. The findings of the study will have particular relevance as the UK approaches its break from the European Union (EU) as domestic demand may suffer considerably.

In order to answer the research questions set out above the study uses UK individual level data from the Global Entrepreneurship Monitor (GEM) and that from the Office for National Statistics (ONS) covering foreign firm employment. In order to control for entrepreneurial and firm characteristics, a multivariate approach is adopted with logit, ordered logit and multinominal logit regressions utilised. The study goes beyond inclusion of simple dummy variables to represent gender, but instead splits the sample to understand how the foreign influence – export relationship differs for the genders and to what extent differences in export propensity and intensity can be explained by differences in factors such as sectoral distribution. The study also explores whether foreign firm influence interacts with the characteristics of entrepreneurs or their businesses to answer the third research question.