Shape up and ship out: Gender constraints to exporting in South Africa

Abstract

Exporting is commonly regarded as one of the main drivers of firm growth. Competing in international markets is often associated with higher levels of productivity and better business practices. Consequently, understanding how to support the development of businesses so that they are able to access and be competitive in export markets is a policy priority for stimulating private sector–led growth. The trade literature highlights barriers to entry for exporting, requiring that firms reach a certain size and quality to compete in foreign markets. These constraints may be particularly binding for female-owned businesses, which are often younger and smaller than their male-owned competitors. The available evidence shows that female-owned businesses tend to be in sectors with low barriers to entry, have limited potential to grow and cater to foreign markets, and face constraints in accessing the factors of production that would allow them to reach sectors with export potential (Hallward-Driemeier 2011). In developing countries, most of the analysis on constraints to the growth of women-owned enterprises has been focused on microenterprises, where female-owned businesses tend to be concentrated or,alternatively, on regional comparisons using small within-country samples. This chapter uses data from the 2012 survey of businesses that employ up to 25 workers in the Kwazulu-Natal Province (KZN) of South Africa. This dataset of more than 2,400 businesses comes from the baseline survey of an impact evaluation on increasing the market access of emerging SMEs. We use these data to identify the determinants of firms’ propensity to export and determine if these vary according to the gender of the business owner. Then, given the importance of gender in explaining exporting, we explore the determinants of firm size and differences in these between male and female owned businesses