Gender differences in business performance: evidence from Kenya and South Africa

The study investigates the performance gap between female-owned enterprises (FOEs) and their male-owned (MOEs) peers, using data obtained from 1,522 firms included in the World Bank Enterprise Survey (WBES) on Kenya and South Africa. We find that FOEs underperform their MOE counterparts and that the performance differential in both countries is driven by the joint effect of gendered differences in endowments and returns on endowments. We also find that differences in returns on endowments contribute the largest gendered performance gap in both countries. Our findings not only corroborate the “female underperformance hypothesis”, but also point to the dominance of the social feminist theory in providing explanation for the observed gendered performance gap in both countries. The findings imply that efforts aimed at equalizing opportunities or removing structural barriers to women entrepreneurship would lead to reductions in the observed gendered performance gap; those targeted at reshaping social structures would have even stronger impact in terms of cutting the performance differential, in both countries.