Wube, M.C. and Atwal, H. (2023) āPolicy and women entrepreneurs in MSES in Ethiopia: Does gender moderate the relationship between policy components of the entrepreneurial ecosystem and the performance of MSES?ā
Overview: Micro and small firms (MSEs) are an increasing source of productive employment in low-income countries. They stimulate growth, competitiveness, and entrepreneurship, while also offering external benefits such as increased productivity, innovation, and efficiency. In Ethiopia, MSEs account for 65% of all firms and 98% of business entities, and the government is paying more attention to them due to their ability to create decent work, contribute to poverty eradication, and create jobs. However, the participation of women is still being questioned. This study examines the entrepreneurial ecosystem from a policy standpoint and determines if gender moderates the relationship between policy and MSE success. The purpose of the study is to identify the effects of policies that the government is developing to boost the performance of women entrepreneurs in MSEs, and to determine if gender moderates the relationship between policy and MSE success.
Methodology: The study used a descriptive approach to examine the entrepreneurial ecosystem of MSEs from a policy viewpoint and an explanatory design to establish causal relationships between policy and MSE performance. A total sample of 498 was drawn from a population of 4,086.
Findings: Policy is less supportive to MSEs in Ethiopia’s Amhara region, with the highest mean value for ease of obtaining company licenses and permits and the lowest mean value for tax rate reasonableness. The present study found that MSEs’ overall performance is below average, with income having the greatest mean score and sales volume having the lowest mean score. Baylie (2019) and Audretsch and Belitski (2017) also found that financial and non-financial measures indicate the performance of MSEs, which are affected by various impediments or facilitators. This suggests that MSEs in various parts of the world, including Ethiopia, are obliged to suspend operations even before they have completed their first year.
Conclusion: The study found no significant disparities between men and women in the policy elements of the entrepreneurial environment, suggesting that policy directions are not bringing remarkable results in creating a conducive entrepreneurial ecosystem for women in MSEs. Government bodies should devise a system for formulating workable policies about MSEs to bring remarkable results in developing the ecosystem and the performance of women entrepreneurs. Understanding the policy dimensions of the MSEs’ entrepreneurial ecosystem can help decisionmakers identify gaps for support, and contribute to existing literature on the entrepreneurial ecosystem in MSEs.