Abstract
Despite growing female education in MENA countries, the labor force participation and employment rates of the region’s women remain quite low. A number of recent papers on the role of women in MENA economies have suggested that female entrepreneurship may contribute to greater job creation and labor force participation by women in the region. However, the progress of many MENA countries’ in this regard remains relatively limited. To understand the reasons behind this slow progress, in this paper we explore the role of government regulations in job creation by female-run (owned and managed) firms in MENA countries and contrast the results with the way regulations are applied to male-run firms. In doing so, we examine a series of hypotheses concerning the regulators motives for differential treatment of firms by the gender of the owner or manager. In particular, one view of such differential treatment is that female-run firms may be regulated more strictly due to the same forces that cause discrimination against women more broadly in MENA societies. On the other hand, an opposite view holds that female-run firms may face less harassment by the regulators because women are more likely to demand professionalism and refuse to pay bribes, hence discouraging would-be corrupt officials from engaging in malfeasance.
The empirical work in this paper is carried out based on the World Bank’s Enterprise Survey data sets. This data has been collected since early 2000s in 125 countries, including about a dozen MENA countries, with some countries having multiple surveys or panel data. Each survey in a given country and a given year offers data for more than 100 variables for several hundred firms. These data sets have been used in many studies. However, the differential regulation of firms by the gender of the owner or manager has not been examined systematically.
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