Factors Mediating Gender and Firm Performance in Lao Micro, Small, and Medium Sized Enterprises

Asia Pacific Management Review 17(2) (2012) 145-175
www.apmr.management.ncku.edu.tw
Factors Mediating Gender and Firm Performance in Lao Micro, Small, and
Medium Sized Enterprises
Sengaloun Inmyxai a*, Yoshi Takahashia
a
Graduate School for International Development and Cooperation, Hiroshima University, Japan
Received 13 August 2010; Received in revised form 18 November 2010; Accepted 10 April 2011
Abstract
This study investigated firm resources, networks, and operation factors that mediate the
relationship between the gender of entrepreneurs and firm performance in Lao micro, small,
and medium sized enterprises (MSMEs). The sample consisted of 1,534 companies, made up of
896 male-headed firms and 638 female-headed firms, with 1 to 99 employees. By the use of
ordered probit, binary logistic, and multiple linear regression models, the study examined
whether male-headed firms outperformed those led by females through consideration of firm
resources, networks, and operation factors. The findings showed that some firm resources and
networks mediate the relationship between gender and firm performance and that male-headed
firms outperformed female-headed ones. However, operation factors did not show any impact
on the performance of male- and female-headed firms and there was no evidence of superior
performance. This paper suggests policy implications for both policy implementers and
policymakers that firm resources (human and tangible resources) and networks (network
participation and Information Communication Technology adoption) should be emphasized
because of their contribution to firm success. The paper also recommends the reduction and/or
elimination of the gap between firms operated by male and female entrepreneurs.
Keywords: Gender, mediate, male-headed firms, female-headed firms, firm performance
1. Introduction*
If there are no satisfactory job opportunities available in both government and nongovernment organizations (NGO), many people in Lao Peoples Democratic Republic (PDR)
seek to create their own businesses and be their own bosses. This leads to an increase in the
number of self-employed entrepreneurs in micro, small and medium sized enterprises
(MSMEs). Female entrepreneurs particularly play significant roles in these MSMEs. The Lao
Department of Statistics (2009) reported that in Lao PDR 29 percent of all businesses with
more than five employees are owned or headed by females. For MSMEs, about 64 percent of
Lao businesses are owned and/or headed by females (MIH and GTZ, 1996). However, many
Lao female entrepreneurs have limited education, work and business experience, and access to
resources (ILO, 2008).
This paper applied three theories with feminist theory (liberal feminist theory and social
feminist theory) as the base and the resource-based view (RBV) and the network theories as
sub-theories. It hypothesized in a way that was consistent with social and liberal feminist
*
Corresponding author. E-mail: sengaloun777@yahoo.com
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S. Inmyxai, Y. Takahashi / Asia Pacific Management Review 17(2) (2012) 145-175
theories as significant impacts of controlling resource endowments were expected to be

influencing factors in the case of Lao MSMEs. These three theories were applied in a
complementary way.
In the management field, RBV theory is a well-known concept in the investigation of the
relationship between firm resources and firm success. In this context, if male and female
entrepreneurs have equal opportunities to control similar firm resources, then similar firm
performances can be expected. Furthermore, according to the network theory the process that
links networks to firm performances consists of three components: soft infrastructure, hard
infrastructure, and knowledge and information flow through networks. Applying these to male
and female entrepreneurs, if they have similar networks, they may perform similarly. Thirdly,
the suggestions of liberal feminist theory and social feminist theory may be observed when
male and female entrepreneurs adopt similar operation approaches, leading to the performances
of male and female entrepreneurs being expected to be similar.
Research has been conducted in the area but it is insufficient to check the effects of the
relationship between the gender of entrepreneurs and firm performance. Differences in firm
performances based on gender have been indirectly observed through, for instance,
controlling/seeking key resources, having better networks, and adopting different operation
approaches. RBV is a very popular theory to explain the condition of firm resources
particularly in least developed countries as resources are not considered to be equally
distributed among male- and female-headed firms. Business networks should be emphasized
because the flow of information and knowledge is not evenly available to males and females.
Lastly, the other important factor to be considered is the differences in operation between maleand female-headed firms. Moreover, operation factors are expected to have an impact on firm
performances. Therefore, it is interesting to empirically test the differences in firm
performances according to the gender of the entrepreneurs in terms of firm resources, networks,
and operations.
The objective of this paper is to investigate firm resources, networks, and operation factors
that mediate the relationship between the gender of entrepreneurs (or top managers) and firm
performances in Lao MSMEs. The paper is divided into seven sections. Section one is the
introduction. Section two briefly presents the conceptual framework. Section three covers the
literature review and the development of the three hypotheses. Section four describes the
research methodology. Section five presents the data analysis and discussion. Section six
provides the conclusion and policy implications from the findings. Section seven acknowledges
the limitations as well as makes suggestions for further research.
2. Conceptual framework
The conceptual framework provides a snapshot of the objective of this paper. The resource
model is based on the concept of RBV and Grant (2002), the network model is derived from the
network theory, and the operation model is drawn from liberal feminist theory and social
feminist theory. As illustrated in Figure 1, this paper seeks to examine the mediating effects of
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firm resources, networks and operation on the relationship between the gender of entrepreneurs
and firm performance.
Firm
Resources
Gender
Networks
Firm
Performance
Operation
Figure 1. Firm resources, networks, and operation as factors mediating the relationship
between gender and firm performance
Firm resources, networks and operation factors mediate the relationship between gender
and firm performance. This means that the gender of the entrepreneurs indirectly affects firm
performance through firm resources, networks and operation factors or those differences in
firm performance of male and female entrepreneurs can be observed through the firms having
different levels of: firm resources, networks and operation factors. It is assumed that male and
female entrepreneurs with similar resource endowments would perform similarly. This is in
line with the social and liberal feminist theories outlined in the next Section.
3. Literature review and development of hypotheses
This paper draws on both liberal feminist theory and social feminist theory, which are
expounded by Black (1989), Jagger (1983) and Fischer et al. (1993) to provide an insight into
factors (firm resources, networks, and operation factors) that affect the performances of firms
involving male and female entrepreneurs, an area not addressed by existing literature.
Liberal feminism (LF) is based on the assumption that females and males are equally
capable of rational, human behavior (Fischer et al., 1993). The theoretical explanation for
observed differences in the achievements of males and females is that females have less
frequently realized their full capabilities only because they have been deprived of essential
opportunities such as education. Observed psychological differences are assumed not to be
innate, but rather rooted in the ways that females socialization discourages them from
developing their full capacities. Physical differences between males and females are not
relevant, as rationality is seen as having no physical basis, and females and males are assumed
to be equal in their rational capacity. Other empirical studies that investigated the psychological
characteristics of entrepreneurs through the exploration of cognitive and personality aspects
were completed by Catley and Hamilton (1998) and Sexton and Bowman-Upton (1990). These
found that there are no significant differences between male and female entrepreneurs
regarding psychological characteristics.
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LF believes that if females gain access to equal opportunities, females and males will
actualize their potential rationality more equally resulting in the diminution and disappearance
of observed psychological gender differences (Fischer et al., 1993). An implicit assumption of
LF is that females will become more like males because of the removal of the basis for existing
differences that is the result of females relative deprivation. A prerequisite for this is the
identification and eradication of legal and traditional forms of discrimination. These include the
tendencies for females to be encouraged to take less practical types of education and to enter
jobs that require fewer technical skills, actions that reduce their opportunities to acquire
experience to establish and run larger, more profitable firms.
Social feminism (SF) suggests that there are differences between males and females
experiences from the earliest moments of life that result in fundamentally different ways of
seeing the world. Female experiences are an equally valid basis for developing knowledge and
organizing society (Calas and Smircich, 1989). In contrast to liberal feminist thought, males
and females are not considered essentially the same; among males and among females, shared
experiences are assumed to help define a group-based rationality or mode of knowing (Fischer
et al., 1993).
SF has somewhat more diverse theoretical origins, ranging from social learning theory to
psychoanalysis (Fischer et al., 1993). Differences between males and females experiences
stem from the environment and culture surrounding males and females, which can influence
their decision making, strategic choices and business approaches. SF asserts that female
entrepreneurs differ from male entrepreneurs in terms of values and ways of thinking, due to
variations in early and ongoing socialization processes (Black, 1989). Males tend to have high
levels of self-assertion, self-expansion and the urge to be a master, while females are expected
to possess higher communal qualities such as selflessness, a concern for others and
interpersonal sensitivity (Eagly and Wood, 1991).
The foundations of this paper are based on consensus of LF and SF (Black, 1989; Jagger
1983; Fischer et al., 1993), as applied to MSME practices. In this regard, LF is concerned with
different levels of control over resource endowments, while SF is not only involved with
different levels of resource endowments but is also concerned with different motivation in
terms of using these endowments in order to achieve better performance. In particular, the two
theories provide a significant foundation for a comparative study on firm performance and its
antecedents. In this regard, LF is based on the assumption that if male and female
entrepreneurs have the same levels of firm endowments, they expect to achieve similar firm
performance, whereas SF makes the argument that even if male and female entrepreneurs
control similar or same levels of endowments, they will not achieve similar firm performance.
This is based on the notion that decisions and strategies, in terms of implementation of these
endowments, are influenced by culture, by socialization and the environment within which
these entrepreneurs have grown up, and so these differences between male-headed firms and
female-headed firms may be reflected in differences in firm performance.
3.1 Firm resources as a factor mediating the relationship between gender and firm performance
Firm resources include anything that a firm possesses, such as assets, liabilities, capital,
education, and experience. The gender of entrepreneurs is related to firm resources. Different
levels of firm resources in male-headed firms (MHFs) and female-headed firms (FHFs) can
result in differences in firm performance as suggested by RBV.
In business practice, male entrepreneurs tend to have more resources compared to female
entrepreneurs because of the stereotyping of female entrepreneurs as conservative and riskaverse compared to males who are seen as more likely to take risks (Meier and Masters, 1988).
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Females tend to have fewer tools, assets, and chances compared to males in small business
(Teoh and Chong, 2008). This implies that FHFs may have fewer resources, such as physical
technology and business finance, and MHFs tend to be in a better position in terms of firm
resources.
This may be the case in regard to access to business finance. Several studies have shown
that female entrepreneurs are discriminated against by banks through higher interest rates and
requirements for high levels of collateral and co-signers on loans and lines of credit (Stevenson,
1986). A gender bias in Canadian banking practices was found in terms of interest rates on
lines of credits and loans, requirements for loan collateral, rates of loan approvals, and cosignature requirements from spouses (Riding and Swift, 1990). This may be explained by the
fact that loan officers may not be familiar with applications from female entrepreneurs and
therefore seek security for their lending decisions over and above tangible securities of equity
and fixed assets (Hoffman, 1972).
Differences in other firm resources, such as levels of education and experience of male and
female entrepreneurs, can lead to differences in firm performance. Education levels, expected
to increase the possibility of entrepreneurial activity, productivity and relative success, of micro
entrepreneurs in Jamaican firms were investigated to evaluate the validity of the human capital
theory (Honig, 1998). Robinson and Sexton (1994) also observed that the general education
and experience of entrepreneurs have a strong positive impact on firm success.
It appears that there is connection between business finance and entrepreneurs education
and work experience in terms of access to formal finance. Fay and Williams (1993) observed
that females face gender discrimination when seeking start-up capital but suggested that such a
behavior by loan officers may not be intentional. This is partly because applications from
borrowers with low personal equity and limited education and experience in the nominated
fields are often made by female entrepreneurs (Bowen and Hisrich, 1986; Hisrich and Brush,
1986; Humphreys and McClung, 1981). This can lead to rejection of loans. Education levels of
female entrepreneurs seem to be an additional intangible requirement in the form of loan
security as one of the criteria to obtain loans (Jankowicz and Hisrich, 1978). Insufficient access
to business finance can be seen as barriers for FHFs and can be considered as contributing to
their underperformance in comparison to MHFs.
As a result of the findings of the literature review, this paper proposes hypothesis 1.
Hypothesis 1: Firm resources mediate the relationship between the gender of entrepreneurs
3.2 Networks as a factor mediating the relationship between gender and firm performance
The level of participation in networks by male- and female-headed firms is important
because different conditions produce different performances. Networks can be useful links for
entrepreneurs in MSMEs to boost the sales and supplies through personal contact, leading to
improved performance. Both MHFs and FHFs can improve their performance through
networks with important external parties such as suppliers, customers, and financial institutions.
Differences exist in networks based on gender, one study showing that females differ in
terms of priorities in establishing networks (Teoh and Chong, 2008). These authors stated that
males motivations regarding networks are normally in seeking personal gain whereas females
emphasize affective considerations in social relationships. Also, differences in management
styles according to gender may be part of the reason why females are often excluded from male
networks. Therefore, different levels of network participation can contribute differences in
performances of male- and female-headed firms.
Differences in perception or interests in terms of network participation between MHFs and
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FHFs can be observed that can result in varying potential to enjoy the benefits. For example, in
Malaysia, female entrepreneurs and industrial associations have been established to serve as a
platform for female entrepreneurs to create a network for exchanging information and
experiences as well as providing different means to support, such as training programs,
seminars, and workshops on motivation, leadership, and entrepreneurial development (Teoh
and Chong, 2007). However, female entrepreneurs still lack formal networks because they are
not interested in participation. The lack of networks among female entrepreneurs may impede
the acquisition of informal advice and group financing that are important for the survival and
growth of firms. The challenge faced by female entrepreneurs is to participate in networks so
that they can enjoy the benefits and improve their firm performance.
Different levels of participation in informal networks based on gender can be observed. As
a result different performances of MHFs and FHFs can be expected. Male entrepreneurs seem
to establish better networks that can contribute to better performance compared to female
entrepreneurs. Furthermore, male entrepreneurs tend to have stronger network ties that have
traditionally been viewed as a way of obtaining power, a factor critical to a managers success
(Bacharach and Laurer, 1988; Kanter, 1988). However, females are often excluded from social
or informal networks such as male-only clubs, old boys networks, and business lunches
(Brush, 1990; Smeltzer and Fann, 1989), by lack of time (Belcourt et al., 1991), and due to
their domestic responsibilities at home. Such networks can link firms with key external partners
and help them to achieve superior performance in business practices.
Firm performance may also be affected by another gender-influenced factor, the adoption
of Information Communication Technology (ICT). ICT has a positive effect on firm
performance not only in terms of productivity, profitability, market value, and market share,
but also on intermediate performance indicators such as process efficiency, service quality, cost
saving, organizational and process flexibility, and customer satisfaction (Bartelsman and Doms
2000; Brynjolfsson and Yang 1996; Dedrick et al., 2003; Kohli and Devaraj 2003; Melville et
al., 2004). The adoption of ICT is crucial in firm performance and the conservatism of female
entrepreneurs, compared to males, to adopt it may lead to an underperformance of FHFs.
The receiving business development services (BDS) leads to a general improvement in firm
performance through the acquisition of knowledge and information, especially desirable for
firms seeking finance for expansion. One of the studies is that receiving advice from
accountants including useful advice associated with strategic decision has been positively
associated with performance (O Neill and Duker, 1986). Moreover, development services from
outside firms were found to be related to revenue performance for Israeli female entrepreneurs
(Lerner et al., 1997). FHFs may not be active in the acquisition of knowledge and information
from BDS and, as a result, different performances by MHFs and FHFs can be expected.
These factors regarding the differences for male and female entrepreneurs in the existence
and use of formal and informal networks, ICT adoption, and the use of BDS are recognized as
having an effect on the relationship between gender and firm performance that is manifested by
more positive returns for MHFs and FHFs. As a result, this paper proposes the following
hypothesis:
Hypothesis 2: Networks mediate the relationship between the gender of entrepreneurs and firm
performance
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3.3 Operation as a factor mediating the relationship between gender and firm performance
A number of reasons can be observed why females and males perform differently in
businesses. Different levels of operation by male- and female-headed firms may be one of the
reasons and it can be treated as a factor mediating the relationship between the gender of
entrepreneurs and firm performance as firms achieve better performance through the
implementation of better approaches.
The gender of entrepreneurs influences operation that can contribute to different
performance. Operation includes premises for business, operation months, and presence of
competitiveness. The first of these involves the matter of selection of places to carry out the
business, that is, whether the business is home-based or outside home-based (Collins-Dodd et
al., 2004; Fasci and Valdez, 1998; Kalleberg and Leicht, 1991; Loscocco et al., 1991;
Lustgarten, 1995). Operation months indicate the number of hours spent by the entrepreneurs in
their business activities (Fasci and Valdez, 1998; Lustgarten, 1995). The presence of
competition is the perception of threats and opportunities by entrepreneurs and males and
females may take different approaches to cope with this. Therefore different performances by
MHFs and FHFs can be expected due to the differences in operation.
The gender of entrepreneurs is associated with operation approaches as MHFs and FHFs
exhibit differences in selection of places for business, allocation of time for business, and risktaking in regard to the presence of competition, resulting in different outcomes. Therefore, the
paper proposes hypothesis 3.
Hypothesis 3: Operation factors mediate the relationship between the gender of entrepreneurs
3.4 Firm performance
Financial data is the preferable indicator of firm performance but firms are often unwilling
to disclose confidential financial data unless the laws require them to disclose it to the public.
Public disclosure, however, is more likely required for listed companies than for MSMEs.
Hence, this paper uses a subjective measure of financial performance based on annual sales
turnover. The subjective performance measures have been widely used in strategy-related
research and organizational research (Dess, 1987; Dess and Robinson, 1984; Lawrence and
Lorsch, 1967; Powell, 1992; Powell and Dent-Micallef, 1997; Robinson and Pearce, 1988;
Spanos and Lioukas, 2001; Venkatraman and Ramanujam, 1986) although financial data
remain popular. However, financial data is criticized for being unreliable and subject to
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inconsistent accounting practices by firms or even to managerial manipulation for different

reasons such as avoiding payment of high corporate income taxes or personal income taxes
(Dess and Robinson, 1984; Powell and Dent-Micallef, 1997; Sapienza et al., 1988). The annual
sales turnover is based on a questionnaire, a method used previously (Anna et al., 1999; Du
Rietz and Henrekson, 2000; Inmyxai and Takahashi, 2009a, 2009b, 2010a, 2010b, 2010c; Rosa
et al., 1996).
It should be noted that even though studies of the similarities and differences in the
performance of male- and female-headed firms increase, it is not easy to compare results across
studies because performance in entrepreneurial businesses was measured differently depending
on data availability on a case by case basis.
3.5 Control variables
Control variables are used to justify factors other than theoretical variables that could
explain the variance in dependent variables. In this paper, firm size, firm age, and industry
sectors are used as control variables.
Firm size: Firm size can reflect the past success and may influence the current firm
performance (Aldrich, 2000; Aldrich and Auster, 1986; Ravichandran and Lertwongsatien,
2005). Firm size can also be an important determinant of firm performance and survival
(Mukhtar, 2002). Bigger firms can provide economies of scale compared to smaller firms (Dass,
2000) and are able to produce larger quantities of output by spreading their fixed costs. Bigger
firms also benefit from the improved capacity to access critical resources such as business
finance (Penrose, 1995), particularly low cost capital (Goerzen, 2007). Hence, big firms can
gain a competitive advantage and a better performance. Ghemawat (1986) suggested that larger
size firms gain advantages of accessing resources or customers, and/or restricting rivals
options. However, Chandy and Tellis (2000) and Kanter (1988) argued that bigger firms are
less adaptive and flexible and less able to change their resource base. As this paper uses the
firms sales turnover as a performance indicator, it needs to control the firm size to avoid bias
in the model.
Firm age: Firm age can be seen as an indication of external legitimacy of the existence of
inter-firm relationships, staying power, and pervasiveness of internal routines (Fichman and
Kemerer, 1993; Kalyanaram and Wittink, 1994). All these may impact on current firm
performance. Young firms may face the responsibilities of newness that can confound their
performance (Aldrich and Auster, 1986; Hannan and Freeman, 1984; Ravichandran and
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Lertwongsatien, 2005). Young firms seem to have lower sales and therefore lower profits
(Watson, 2002), whereas older firms seem to be larger in terms of sales turnover, number of
employees, and capital assets (Rosa et al., 1996). Furthermore, the older firms tend to establish
good networks and reputation in the selected markets as well as have an established
relationship with business partners, suppliers, financial institutions, communities, government,
and customers. Therefore, firm age can represent the power and experience of the firm in the
chosen industry, an influential factor for firm success.
Industry sectors: It is also important to control industry sectors to remove the bias in the
findings due to the variation in industry sectors (Boden and Nucci, 2000; Carter et al., 1997;
Chell and Baines, 1998; Du Riet and Henrekson, 2000; Fischer at al., 1993; Mukhtar, 2002;
Robinson and Sexton, 1994; Singh et al., 2001). FHFs are dominant in retail sales and the
personal and educational service industry, a so-called female ghetto (Kalleberg and Leicht,
1991). Firms in the services and trade industries normally expect low growth rates and less
success quantified by earnings or returns on investment compared with firms in other industries
because these industries are labor intensive and highly competitive in terms of their product
markets (Humphreys and McClung, 1981). The different industrial sectors can influence
organizational context, for example, implication for firm cultures, managerial style, and control
systems (Lapierre and Denier, 2005). This paper groups industry into three sectors,
manufacturing, trading, and service. Since the nature of each sector is different, influencing
factors can be diversified across industry sectors. The behavior, strategy choices, and business
approaches can be observed differently among firms and consequently can have different
impacts on performance.
4. Research methodology
4.1 Sample and data collection
This paper used unbalanced panel data that was collected in 2005, 2007 and 2009 by the
Enterprises Baseline Survey (EBS) from the German Agency for Technical Cooperation (GTZ).
The GTZ conducts the EBS every two years. Only enterprises that were formally registered
were selected. The survey in 2005 included 370 companies in four Lao provinces, Vientiane
capital, Champasack, Luang Prabang, and Luang Namtha. The first three provinces belonged to
the economically dynamic provinces and the fourth was a rural province. For the 2007 survey,
the sample size was 470 Lao MSMEs from five Lao provinces, Vientiane capital, Champasack,
Luang Prabang, Luang Namtha, and Savanakhet. For the 2009 survey, the sample size was 694
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Lao MSMEs from the same five Lao provinces. The sample involved 1,534 companies, 896
were male-headed firms and 638 were female-headed firms, with 1 to 99 employees.
4.2 Measurement
Table 1 shows the measurements and descriptions of variables directly from the
questionnaires developed from existing literature, as cited for most variables
Table 1. Measurements of variables
Variables
Measurements/descriptions
Control variables
Firm Size
Firm size, firm age and industry sectors

This is measured by the total number of current full-time
employees. According to Prime Ministerial Decree No.42 (2004),
the Lao PDR defines a micro firm as consisting of 1 to 2
employees, a small firm as 3 to 19 employees, a medium firm as
20 to 99 employees, and a large firm has 100 employees or more.
This is the number of years the MSMEs have been
established/incorporated (Ravichandran and
Lertwongsatien,
2005), which is taken to represent industry experience for the firm
These were recorded as three industry dummy variables by
controlling manufacturing, trading and service (Robinson and
Sexton, 1994).
Performance
This is measured by ordinal numbers from 1 to 5 corresponding to
the level of annual sales turnover (as reported to the national tax
office). From the lowest to the highest level these are: less than
200 Million Kip; 200-400 Million Kip; 401-700 Million Kip; 7011,000 Million Kip; and more than 1,000 Million Kip (in late 2010,
1 US dollar equals approximately 8,041 Lao Kip).
Firm age
Industry sectors
Dependent Variable
Performance
Independent Variables
Gender
Firm Resources
Human Resource
Variables
Education of
entrepreneurs
Male entrepreneur is represented by 1 while female entrepreneur

is 0.
Firm resources are based on the concept of RBV and Grant (2002)
that classified firm resources into three categories, human,
intangible, and tangible resources. Each category has a subcategory or variable in the following.
Education of entrepreneurs, training of entrepreneurs, training for
employees and working experience of entrepreneurs
This is measured by ordinal numbers from 1 to 11, corresponding
to the level of education of owners/managers. From the lowest to
the highest level these are: no schooling, some primary school,
completed primary school, some lower secondary school,
completed lower secondary school, some upper secondary school,
completed upper secondary school, vocational, technical, higher
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Training of
entrepreneurs
Training of employees
Work experience
Intangible resource
variable
Reputation
Tangible resource
variables
Physical technology
Business Finance
Network Variables
Network participation
(undergraduate) and post-graduate.

This is whether or not any training was received since the
business started. If the respondent chose yes, then the next
question asked to the respondent to describe the kind of
management training, including: health and safety, cost
calculations, business management, accounting, marketing, law
and regulations, quality management, business finance and others.
This variable is measured as a dummy variable.
This question is whether or not the employees received any
training. If the respondent chose yes, then the next question
asked was to describe the kind of management training they have
had, whether it was on: customer services, accounting, record
booking, operation of machinery and tools, computer,
documentation and filing and others. Thus, this variable is
measured as a dummy variable.
This is measured by the age of owners/managers, after subtracting
the total years spent in education (Robinson and Sexton, 1994).
Experience of entrepreneurs has a close relationship with their
education and thus work experience is defined as the number of
years an individual has been able to work after completing his or
her education (Ibid). Because of a limitation of the data set, a
more comprehensive measure of experience cannot be specified.
Reputation is used marketing and advertising, as proxies, to build
reputation (Inmyxai and Takahashi, 2009a; Inmyxai and
Takahashi, 2010d).
The question is whether the firm had some investment in
marketing and advertising for the last year or not. In this research,
this variable is measured as a dummy variable.
Physical technology and business finance
This is measured by ordinal numbers from 1 to 5 corresponding to
the level of technology in the business from the lowest through
the highest level: hand tools/utensils; portable power tools and
electric appliances; small fixed motorized equipment; large
machinery; and motorized vehicles.
The question is whether the firm received loans or not.
Consequently, this variable is measured as a dummy variable.
Network variables include three main indicators: network
participation (as soft infrastructure); ICT (as hard infrastructure)
and business development services (as information and
knowledge flow through the networks).
The question asked whether the firm is a member of any specified
organization or not. These organizations are: the Lao National
Chamber of Commerce and Industry (LNCCI), business
associations,
Lao
Young
Entrepreneurs
Associations,
Associations of women entrepreneurs, the Vientiane and Business
Women Association, business associations, business groups,
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Information
communication
technology (ICT)
Business development
services (BDS)
Operation Factor
Variables
Premises for
businesses
Operation months
Presence of
competitiveness
business clubs, womens business groups, provincial chamber of

commerce and industry. This way of measuring network
membership is consistent with Teoh and Chong (2007, 2008).
Thus, being a member in any of the mentioned organizations is a
proxy for networks. This variable is measured as a dummy
variable.
The question is whether the firm uses some type of equipment for
communication. If the respondent chose yes, the next question
asked what types of equipment for communication did
respondents have including, for example: telephone, fax,
telephone/fax, internet, and others. In this research, ICT
measurement is consistent with Erffmeyer and Johnson (2001),
using aggregated types of communication.
This question is whether or not the owners/managers of a firm
received any advice for the development of his/her business. This
variable is measured as a dummy variable.
Operation factors include three main indicators: premises for
businesses, operation months and presence of competitiveness
(used as a proxy for a degree of taking a risk for operation).
This question is whether the place of business is home-based or in
outside premises. If the business uses places outside the home as
an office, it is given 1. If the business uses the home as the office,
it is given 0. This variable is measured as a dummy variable.
This question indicates the amount of time that the entrepreneurs
have put into the business (part-time/full-time).
This question is whether or not the owner/managers have any
problems with competitiveness. This variable is measured as a
dummy variable. Presence of competitiveness is used as a proxy
for a degree of taking a risk for operation.
5. Analysis and Discussion

5.1 Ordered probit, binary logistic and multiple linear regression models
The models in this paper were ordered probit, binary logistic and multiple linear regression
depending on the dependent variables of each model. If the dependent variables were
continuous, the multiple linear regression model was used, if the dependent variables were
discrete/category (yes or no), the binary logistic regression model was used, and if the
dependent variables were both category and measured by using ordinal measures from 1 to 5
(Davidson and MacKinnon, 1993; Godfrey, 1988; Long, 1997), the ordered probit regression
model was adopted.
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5.2 Results of analysis and discussion

Differences both in characteristics of male and female entrepreneurs and in business
characteristics are displayed in Table 2. Male entrepreneurs were 60.18 percent of the sample
and female entrepreneurs were 39.82 percent.
Education levels of male and female entrepreneurs revealed significant differences. Male
entrepreneurs tended to have a higher education level relative to female entrepreneurs. For
example, 9.04 percent of male entrepreneurs obtained post-graduate degrees whereas about
2.45 percent of female entrepreneurs fell into this group. The number of male entrepreneurs
who completed undergraduate degrees was also higher than female counterparts, while female
entrepreneurs whose highest education level was completion of primary school up to vocational
school was a relatively higher proportion than male entrepreneurs.
MHFs seem to be older than FHFs in terms of business practices. The majority (72.68
percent) of FHFs were between 1 to 10 years, while 65.70 percent of MHFs fell in the same
group. Twenty-nine point two percent of MHFs had stayed in business between 11 to 20 years
compared to 24.17 percent of the firms owned by females. In general, differences in age of
businesses existed in male- and female-headed firms but in both groups, the businesses tended
to be young.
The differences in firm size can have some impact on gender-based performance. The
majority of firms in both gender categories were small-size (64.45 percent of the FHFs
compared to 60.14 percent of the MHFs). In micro-size firms, FHFs showed a slightly higher
proportion than MHFs. However, in medium-size MHFs were represented by a percentage that
was twice as high as that of FHFs.
For the industry sectors, the number of FHFs was more in trade (48.18 percent), then
service (37.13 percent), and manufacturing (14.36 percent). In contrast, MHFs were more in
service (49.83 percent) followed by trade (29.43 percent) and manufacturing (20.74 percent).
Table 3 displays the means, standard deviations and Pearson correlation matrix of the
research variables. This table does not show high correlations but multicollinearity was doublechecked by using variance inflation factor (VIF). VIF showed no serious multicollinearity
problems because the VIF of all research variables was between 1.049 to 1.531, far below the
VIF of 10 that Kennedy suggested as a warning of harmful collinearity (Kennedy, 1992, p.
183). This suggested that there was no problematic multicollinearity that existed in the models,
meaning that the VIF statistics for each explanatory variable were at only above 1.0 (Neter et
al., 1985). This showed that no variable caused a harmful influence on the results because of
multicolinearity (Sharfman and Fernando, 2008).
157
Table 2. Respondents demographic information for MHFs and FHFs

MHFs
Frequency
Percent
863
60.18
FHFs
Frequency
Percent
571
39.82
Gender
Male
Female
Education
No schooling
13
1.51
18
3.15
Some primary school
24
2.78
35
6.13
Completed primary school
97
11.24
102
17.86
Lower secondary school
122
14.14
102
17.86
Upper secondary school
193
22.36
133
23.29
Vocational
71
8.23
59
10.33
Technical
36
4.17
12
2.10
Higher (undergraduate)
229
26.54
96
16.81
Post-graduate
78
9.04
14
2.45
0-10 years old
567
65.70
415
72.68
11-20 years old
252
29.20
138
24.17
21-30 years old
35
4.06
13
2.28
31-40 years old
0.70
0.53
41-60 years old
0.35
0.35
Micro: 1-2
163
18.89
145
25.39
Small: 3-19
519
60.14
368
64.45
Medium: 20-99
181
20.97
58
10.16
Manufacturing
179
20.74
82
14.36
Trade
254
29.43
277
48.51
Service
430
49.83
212
37.13
Firm Age
Firm Size (No. Employees)
Industry Sectors
158
Mean
159
PER
GD
EDU
TRENT
TREMP
WEXP
REP
TEC
BF
NW
ICT
BDS
PB
OPM
PCT
FS
FA
Manu
Trading
Service
S.D
10
11
12
13
1.94
1.46
0.60
0.49
.19**
5.45
2.13
.30**
.21**
0.42
0.47
.26**
.10**
.21**
0.67
0.47
.24**
0.02
.29**
.25**
33.10
11.86
.07**
.11**
.36**
0.03
-0.04
0.05
0.22
0.03
0.03
.11**
0.02
0.05
-.06*
2.46
1.16
.17**
.13**
.06*
-0.04
.11**
.07*
0.00
0.40
0.49
.20**
.12**
.07*
.13**
.08**
-0.01
0.05
-0.01
0.37
0.48
.20**
.15**
.16**
.26**
.18**
.06*
0.00
.14**
.08**
2.01
0.77
.25**
.13**
.28**
.10**
.19**
-0.01
.14**
.13**
0.02
.20**
0.82
0.38
0.00
-0.04
.11**
.12**
.07**
0.01
.09**
.10**
.11**
.12**
-.05*
0.50
0.50
.16**
0.02
.10**
.08**
0.05
.09**
0.01
.10**
0.03
.09**
.09**
-0.03
11.70
1.30
.07**
.10**
.08**
-0.05
-0.05
0.04
.07**
-.06*
.09**
.07**
0.00
0.00
.05*
14
15
16
17
18
19
1
1
0.64
0.48
0.02
.07*
.08**
-0.02
.08**
0.03
0.01
.18**
-0.03
.09**
.11**
.08**
0.02
-0.02
11.64
15.37
.52**
.16**
.30**
.22**
.24**
0.03
.15**
.17**
.15**
.17**
.24**
0.01
.18**
.08**
0.04
8.70
6.69
.12**
.07**
0.01
-0.02
-.05*
.35**
-0.01
.08**
.10**
-0.02
.06*
-0.01
.09**
-0.01
0.02
.15**
0.18
0.39
0.04
.08**
0.02
0.03
-.06*
.06*
.23**
0.00
0.00
-0.03
.10**
0.00
-0.05
.08**
0.02
.16**
0.05
0.37
0.48
-0.02
.19**
.14**
.18**
.12**
-.06*
-.07*
-.06*
-0.03
.20**
.15**
-0.01
-0.03
.14**
0.00
.18**
.07**
.36**
0.45
0.50
-0.01
.13**
.12**
.15**
.16**
0.01
.11**
.06*
0.03
.21**
.07**
0.00
.07*
.08**
-0.02
0.05
.11**
.43**
-.69**
Variance inflation factor (VIF) ranges from 1.049 to 1.531

*Correlation is significant at the 0.05 level (2-tailed); **Correlation is significant at the 0.01 level (2-tailed);
PER=Performance; GD =Gender; EDU = Education; TRENT = Training of entrepreneurs; TREMP = Training for employees; WEXP = Working experience;
REP =Reputation; PTEC=Physical technology; BF=Business finance; NWP = Network participation; ICT = Information communication technology; BDS = Business
development services; PB = premises for business; OPM = Operation months; PC=Presence of competitiveness; FS=firm size; FA=firm age; Manu = manufacturing.
Table 3. Means, standard deviations and correlation matrix
Hypothesis 1(H1): Firm resources mediate the relationship between the gender of
entrepreneurs and firm performance.
Four conditions must be met to support H1 (Baron and Kenny, 1986; Newbert, 2008; Tuan
and Takahashi 2010). These are:
(a) MHFs (gender) must be positively related to firm resources.
(b) Firm resources must be positively related to firm performance.
(c) MHFs (gender) m ust be positiv ely related to f irm performance by excluding firm
resources.
(d) The effects of MHFs (gender) on firm performance must be reduced or elim inated by
including firm resources.
The results of the testing of H1 are displayed in Tables 4 and 5 and sum marized in Table 6.
The findings showed that the majority of firm resources mediate/affect the relationship between
gender and firm performance, indicating that MHFs outperform FHFs in Lao MSMEs. This
was partly through firm resources (hum an resources and tangible resource s but not intangible
resources) as they m et the four conditions. For example, human resources (HR), such as
education, training, and experience of the entr epreneur, affected the relationship between
gender and firm performance but training of employees did not. T hese findings can be
explained by the fact th at the gender of the entr epreneurs indirectly affected firm performance
through HR. For exam ple, gender dif ferences controlled HR with dif ferent capabilities and
competencies through entrepreneurs receiv ing high education, having suf ficient training, and
accumulating longer working experience. This, in turn, had an im pact on the perform ance of
MHFs and FHFs. For tangible resources, physical technology and business finance af fected the
relationship between gender and firm performance, indicating that having high technology
helped firms to be more efficient and/or effective. The acquisition of business finance allowed
firms to engage in strategic business, for
example, the introduction of new products and
services, thus m aintaining good perform ance. This implies that MHFs perform better than
FHFs through the acquisition of m ore credit to finance strategic business activities and finance
physical technology (Sm eltzer and Fann, 1989) as males are
risk-takers while fem ale
counterparts are risk-averse (Meier and Masters, 1988). Females also experience discrimination
in their dealings with banks. However, the gender variable is not related to intangible resources
(reputation) and thus fails to m eet the fi rst condition. R eputation through investm ents in
marketing and advertising did not af fect the relationship between gender and firm performance
because intangible reso urces met only the third a nd fourth condition s. It is surp rising that
reputation through m arketing and advertising is negative statis tically significant to the
performance for both MHFs and FHFs, failing to meet the second condition. A reason for this
may be that their m arketing and advertising ai med at the wrong consumer or customer targets
and therefore worsened their firm
performance. Another reason could be that particular
MSMEs in developing countries may not be accustom ed to m odern ways of introducing and
communicating their goods and services to
customers through m arketing and advertising
orientation. Investment in m odern marketing approach is expect ed to have a high potential
contribution to firm performance compared to th e traditional marketing approach that operates
by word of m outh. In this cas e these en trepreneurs failed to u tilize modern marketing
approaches to boost their sales.
Some of the findings related to hum an and tang ible resources are con sistent with liberal
feminist theory and social fem inist theory be cause male entrepreneurs m ay control dif ferent
levels of these resources and therefore outperform females by the use of them. Specifically, five
of the seven firm resource indicators had mediating effects on gender and firm performance.
Thus, H1 is partly supported.
160
Table 4. Effects of firm resources (Condition 1)

EDU
TRENT
TREMP
WEXP
REP
PTEC
BF
161
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
(Constant)
Firm size
Firm age
Manufacturing
4.80***
0.04***
4.52***
0.04***
-0.42***
0.02***
-0.59***
0.02***
-0.27
0.07***
-0.17
0.07***
26.46***
-0.030
25.73***
-0.04
-1.92***
0.02***
-1.98***
0.02***
0.011***
0.01***
-0.97***
0.02***
-1.21***
0.02***
-0.01
-0.01
-0.02
-0.02**
-0.03***
-0.03***
0.64***
0.64***
-0.02
-0.03
0.010**
0.01**
0.03***
0.02***
0.10
-0.02
2.61***
2.29***
Trading
Service
Gender
Pseudo R2
0.49***
0.37***
0.69***
-0.42***
0.87***
0.40**
0.92***
1.73*
1.82***
-1.49***
-1.99***
0.13
0.02
0.10
0.22***
0.02
0.06
0.18
0.13
-1.48***
-1.99***
0.10
0.13
-0.020
0.096
0.09
0.37**
0.93***
-0.18
0.09
2.06***
0.09
-0.38**
0.87***
0.29**
0.09
0.02
0.13
0.17
0.41***
0.03
LR Statistics
168.09***
173.97***
164.94***
167.02***
72.89***
73.03***
49.62***
62.71***
41.39***
53.98***
Log likelihood
-909.19
-906.25
-830.29
-829.25
-252.04
-251.97
-1850.69
-1844.15
-941.67
-935.37
1434
1434
1434
1434
1434
1434
0.10
0.13
0.13
0.14
Adjusted R
0.10
0.12
0.13
0.13
F-Statistics
N
41.56***
1434
41.9***
1434
54.44***
1434
45.55***
1434
1434
1434
1434
1434
*** Significant at 1% ; **5% ; EDU=Education; TRENT = Training of entrepreneurs; TREMP = Training for employees; WEXP = Work experience;
REP = Reputation; PTEC = Physical technology; BF = Business finance.
Firm Resources
Table 5. Effects of firm resources and firm performance

Firm Performance
Model 1
(Condition 2) (Condition 3)
Model 2
Model 3
(Condition 4)
Model 4
Firm size
0.045***
0.036***
0.044***
0.035***
Firm age
0.006
-0.005
0.004
-0.005
Manufacturing
-0.237**
-0.263
Trading
0.207**
0.263
Service
0.043
-0.395***
0.036
-0.419***
0.355***
0.208***
Gender
Firms Resources
Human Resources
Education
0.135***
0.123***
Training of entrepreneurs
0.362***
0.363***
Training for employees
0.418***
0.431***
Work experience
0.017***
0.015***
-0.459***
-0.458***
Physical technology
0.120***
0.115***
Business finance
0.316***
0.300***
Intangible Resource
Reputation
Tangible Resources
Pseudo R2
0.122
0.178
0.1298
0.1801
LR Statistics
399.23***
581.07***
424.13***
588.61***
Log likelihood
-1434.111
-1343.193
-1421.66
-1339.42
1434
1434
1434
1434
*** Significant at 1%; **5%
162
Table 6. Summary of results to support H1

No.
Four
conditions
must be
met:
MHFs
(gender)
must be
positively
related to
firm
resources in
Table 4
Firm
resources
must be
positively
related to
firm
performance
in Table 5
(Model 2)
Firm Resources
Human Resources
EDU
TRENT
TREMP
WEXP
0.69***
Supported
0.29**
Supported
-0.18
Not
Supported
1.82***
Supported
0135**
Supported
0.362***
Supported
0.418***
Supported
0.017***
Supported
Intangible
Resource
REP
Tangible Resources
PTEC
BF
0.10
Not
Supported
0.22**
Supported
0.41***
Supported
-0.459***
Not
Supported
0.12***
Supported
0.316***
Supported
MHFs (gender) must be positively related to firm performance by excluding firm resources in Table 5
(Model 3). The gender variable was positively statistically significant (0.355***), indicating that MHFs
outperformed FHFs. Hence, it was supported.
The effects of MHFs (gender) on firm performance must be reduced or eliminated by including firm
resources in the Model 4 in Table 5. [By comparing the size of coefficient of gender variable in
condition 3 and gender variable in condition 4, the size of coefficient for gender variable in condition 4
must be either reduced or insignificant]. The finding showed that the size of the coefficient of gender
variable in Model 3 reduced from 0.355*** to 0.208*** (see Table 5). Therefore, it was supported.
Conclusion
of four
conditions:
Supported
Supported
Not
Supported
Supported
Not
Supported
Supported
Supported
Five of seven resource variables met the four conditions and therefore H1 was partly supported
*** Significant at 1% ; **5% ; EDU = Education; TRENT =Training of entrepreneurs; TREMP =Training for
employees; WEXP = Work experience; REP = Reputation; PTEC = Physical technology; BF = Business
finance.
Hypothesis 2 (H2): Networks mediate the relationship between the gender of entrepreneurs and
firm performance.
and Takahashi, 2010). These are:
(a) MHFs (gender) must be positively related to networks
(b) Networks must be positively related to firm performance
(c) MHFs (gender) must be positively related to firm performance by excluding networks
(d) The effects of MHFs (gender) on firm performance must be reduced or eliminated by
including networks.
The results of the testing of H2 are shown in Tables 7 and 8 and summarized in Table 9.
163
The findings showed that networks (network participation and ICT) mediate/affect the
relationship between gender and firm performance because the factors met the required four
conditions. These findings imply that MHFs perform better than FHFs through network
participation and ICT adoption. Male entrepreneurs had more advantages in terms of
networking with external partners (Smeltzer and Fann, 1989) while female entrepreneurs may
not have participated in sufficient networks to enjoy their benefits. In addition, FHFs did not
acquire sufficient ICT to support business operations and improve the efficiency of connecting
with external business partners, thus explaining their poor performance compared to their male
counterparts. For both male- and female-headed firms, participation in networks is a powerful
link with external parties such as suppliers, customers, business partners and government,
adoption of ICT helps to increase the efficiency of communication. In turn, network
participation and ICT adoption had positive impacts on firm performance resulting in better
performance by MHFs.
However, gender was negatively related to BDS which failed to meet the first condition. It
also failed to achieve the second condition as the acquisition of BDS by both MHFs and FHFs
was found to reduce the level of their performance. An explanation for this is that both MHFs
and FHFs may have received irrelevant advice for their businesses. Hence, BDS did not affect
the relationship between gender and firm performance as it met only the third and fourth
conditions, suggesting that MHFs and FHFs cannot improve their performance through BDS.
In general, this finding was in line with liberal feminist theory and social feminist theory
because male and female entrepreneurs do not hold similar networks in terms of participation
and ICT and consequently perform differently. In particular, it can be concluded that only some
networks have an impact on gender and firm performance because two of the three network
indicators are supported. Therefore, H2 is partly supported.
Table 7. Effects of networks (condition 1)
NWP
Coef.
ICT
Coef.
Coef.
BDS
Coef.
Coef.
(Constant)
Coef.
-0.999***
Firm size
0.021***
-1.282***
0.020***
1.639***
0.015***
1.576***
0.014***
1.540***
0.002
1.694***
0.003
Firm age
-0.006
-0.008
0.006
0.005
-0.003
-0.002
Manufacturing
0.303***
0.276***
Trading
-0.271
-0.196
-0.014
-0.059
Service
0.700***
0.704***
0.246***
0.217***
0.005
0.007
Gender
0.468***
0.157***
-0.258**
Pseudo R2
0.056
0.064
0.000
0.003
LR Statistics
104.92***
119.92***
0.300
3.38
Log likelihood
R2
Adjusted R2
F-Statistics
-889.465
-881.96
-671.075
-669.532
1434
1434
1434
1434
0.070
0.068
0.075
0.072
27.04***
23.19***
1434
1434
*** Significant at 1% ; **5% ; NWP = Network participation; ICT = Information communication technology;
BDS = Business development services.
164
Table 8. Effects of networks and firm performance

Firm Performance
(Condition 2)
Model 2
(Condition 3)
Model 3
(Condition 4)
Model 4
0.042***
0.005
-0.286***
-0.284***
-
0.044***
0.004
0.263
0.036
0.355***
0.041***
0.003
-0.330***
-0.333***
0.306***
0.1222
399.23***
-1434.1105
0.355***
0.174***
-0.055
0.142
464.54***
-1401.455
0.1298
424.13***
-1421.66
0.331***
0.169***
-0.039
0.1476
482.41***
-1392.52
1434
1434
1434
1434
Model 1
Firm size
Firm age
Manufacturing
Trading
Service
Gender
Networks
Network participation
ICT adoption
Business development services
Pseudo R2
LR Statistics
Log likelihood
N
0.045***
0.006
0.207**
0.043
*** Significant at 1% ; **5%

Networks
No.
Four conditions must be met:
MHFs (gender) must be positively related to network 0.468***

in Table 7
Supported
Network must be positively related to firm 0.355*** 0.174*** -0.055

performance in Table 8 (Model 2)
Supported Supported Not Supported
MHFs (gender) must be positively related to firm performance by excluding networks in Table 8
(Model 3). The gender variable was positively statistically significant (0.355***), indicating that
MHFs outperformed FHFs. Therefore, it was supported.
NWP
ICT
0.157***
Supported
BDS
-0.258***
Not Supported
The effects of MHFs (gender) on firm performance must be reduced or eliminated by including
networks in the Model 4 in Table 8. [By comparing the size of coefficient of gender variable in
condition 3 and gender variable in condition 4, the size of the coefficient for gender variable in
condition 4 must be either reduced or insignificant]. The finding showed that the size of the
coefficient of the gender variable in Model 3 reduced from 0.355*** to 0.306*** (see Table 8).
Hence, it was supported.
Conclusion of four conditions:
Supported Supported Not Supported
Network participation and ICT adoption met four conditions but not BDS and thus H2 was partly
supported.
*** Significant at 1% ; NWP = Network participation; ICT = Information communication technology;

BDS = Business development services.
165
Hypothesis 3 (H3): Operation factors mediate the relationship between the gender of
entrepreneurs and firm performance.
and Takahashi, 2010). These are:
(a) MHFs (gender) must be positively related to operation factors.
(b) Operation factors must be positively related to firm performance.
(c) MHFs (gender) must be positively related to firm performance by excluding operation
factors.
(d) The effects of MHFs (gender) on firm performance must be reduced or eliminated by
including operation factors.
The results of the testing of H3 are shown in Tables 10 and 11 and summarized in Table 12.
It was found that all three operation factors, premises for business, operation months, and
presence of competitiveness did not mediate/affect the relationship between gender and firm
performance because they did not meet all conditions. Premises for business failed to meet the
first condition but it met the second, third, and fourth conditions indicating that MHFs and
FHFs had better performance through the use of outside-based business. Unlike male
entrepreneurs, females used home-based businesses that provide flexibility that allow the
fulfillment of domestic and business roles. However, home-based businesses may not be
suitable and practical locations for access by customers and suppliers. Operation months failed
to meet all four conditions. For the first condition, gender failed to be positively related to
operation months. For the second, spending a longer time was less efficient in the improvement
of the performance of both MHFs and FHFs. This may be explained by the fact that it is matter
of time management as well as allocating time in inefficient and ineffective ways. Therefore,
operation months failed to improve the performance of MHFs and FHFs.
The presence of competitiveness met the first, third, and fourth conditions. For the first
condition, MHFs were positively related to the presence of competitiveness, meaning that
MHFs were more likely to take risks because the male entrepreneurs perceived this as both a
threat and an opportunity. The males may have also taken necessary business approaches to
cope with the presence of competitiveness. For the second condition, the presence of
competitiveness had nothing to do with firm performance of MHFs and FHFs, indicating these
conditions were neither threats nor opportunities for them.
Generally, operation factors failed to confirm liberal feminist theory and social feminist
theory because male and female entrepreneurs had different premises for business, operation
months, and presence of competitiveness, and these did not have a significant impact on firm
performance. Thus, H3 is not supported.
166
Table 10. Effects of operation factors (condition 1)

PB
OPM
PC
Coef.
Coef.
Coef.
Coef.
Coef.
Coef.
(Constant)
-0.400**
0.384**
11.993***
12.063***
0.576***
0.419**
Firm size
0.033***
0.033***
-0.004
-0.003
0.006
0.005
Firm age
-0.038***
-0.038***
-0.003
-0.002
0.002
0.001
Manufacturing
-0.424***
-0.394***
Trading
0.413***
0.408**
-0.05
-0.001
Service
0.458***
0.459***
-0.334***
-0.303***
-0.116
-0.118
Gender
-0.029
0.276**
-0.173**
Pseudo R2
0.042
0.042
0.002
0.005
LR Statistics
82.56***
82.63***
3.43
9.13
Log likelihood
-952.69
-952.66
-932.23
-929.381
1434
1434
R2
0.024
0.028
Adjusted R2
0.209
0.024
F-Statistics
8.65***
8.12***
1434
1434
1434
***
1434
Significant at 1% ; **5% ; PB = Premises for business; OPM = Operation months; PC = Presence of

competitiveness.
Table 11. Effects of operation factors and firm performance

Model 1
Firm size
Firm age
Manufacturing
Trading
Service
Gender
Operation Factors
Premises for businesses (PB)
Operation months (OPM)
Presence of competitiveness (PC)
Pseudo R2
LR Statistics
Log likelihood
N
***
0.045***
0.006
0.207**
0.043
0.1222
399.23***
-1434.11
1434
Firm performance
(Condition 2) (Condition 3)
Model 2
Model 3
0.044***
0.044***
0.008
0.004
-0.216**
0.263
-0.190**
0.036
0.355***
(Condition 4)
Model 4
0.043***
0.006
-0.267***
-0.249***
0.344***
0.224***
-0.048
0.033
0.1265
413.28***
-1427.09
1434
0.218***
-0.041
0.021
0.1336
436.43***
-1415.51
1434
Significant at 1% ; **5%
167
0.1298
424.13***
-1421.66
1434

Operation Factors
PB
OPM
No.
Four conditions must be met
0.276***
-0.173***
Supported
Not
Supported
Operation factors must be positively related to firm
-0.048
0.033
performance in Table 11 (Model 2).
Not
Not
Supported
Supported
MHFs (gender) must be related to firm performance by excluding operation factors in Table 11
(Model 3). The gender variable was statistically significant (0.355***), meaning that MHFs
outperformed FHFs. Thus, it was supported.
The effects of MHFs (gender) on firm performance must be reduced or eliminated by including
operation factors in the Model 4 in Table 11. [By comparing the size of the coefficient of gender
variable in condition 3 and gender variable in condition 4, the size of the coefficient for gender
variable in condition 4 must be either reduced or insignificant]. The finding showed that the size of
the coefficient of the gender variable in Model 3 reduced from 0.355*** to 0.344*** (see Table
11). Therefore, it was supported.
Conclusion of four conditions:
Not
Not
Not
Supported
Supported
Supported
Premises for businesses, operation months and presence of competitiveness did not meet the four
conditions and therefore H3 was not supported.
2
3
4
MHFs (gender) must be positively related to operation

factors in Table 10.
PC
-0.029
Not
Supported
0.224***
Supported
*** Significant
at 1% ; **5% ; PB = Premises for business; OPM = Operation months; PC = Presence of

competitiveness.
6. Conclusion and policy implications

6.1 Findings and conclusion
The objective of this paper was to investigate firm resources, networks, and operation
factors that mediate the relationship between the gender of entrepreneurs and firm performance
in Lao MSMEs. Three hypotheses were empirically tested in a sample of 1,534 observations of
Lao MSMEs from different industries. As presented in Section 5.2, the results partly supported
hypotheses 1 and 2 but hypothesis 3 was not supported. The findings are mainly in line with
liberal and social feminist theories that different genders do not have similar firm resources and
networks thus resulting in different performances. However, the study does not provide
evidence that operation factors are line with liberal feminist theory in this case.
For H1, two out of the three main firm resource indicators (some human resources and all
tangible resources but not intangible resources) mediate/affect the relationship between the
gender of entrepreneurs and firm performance, meaning that MHFs outperform FHFs through
accessing and controlling these firm resources. The findings confirm that for firm resources, all
tangible resource indicators affect the relationship between gender and firm performance
whereas only some of human resource indicators affect the relationship. Intangible resources do
not affect the relationship. For H2, two out of the three network indicators (network
participation and ICT adoption but not BDS) mediate/affect the relationship between the gender
of entrepreneurs and firm performance. Specifically, the findings confirm that MHFs
outperform FHFs through the impacts of better network participation and advanced ICT
adoption but not BDS. For H3, operation factors do not mediate/affect the relationship between
the gender of entrepreneurs and firm performance through premises for business, operation
168
months, and presence of competitiveness. In this case, there is no evidence that MHFs
outperform FHFs through operation factors.
6.2 Policy implications
It is anticipated that this paper will provide useful information on the performance of firms
headed by males and females for implementers of policy and policymakers. Appropriate use of
this information should assist in the reduction and/or elimination of the gap between MHFs and
FHFs.
6.2.1 Implementers of policy
Implementers of policy need to offer some practical implications that improve firm
performance based on the findings of this paper. This paper showed that there are unequal
opportunities in Lao MSMEs based on the gender of the entrepreneurs in the areas of firm
resources (human resources, tangible resources) and networks (network participation and ICT
adoption) that lead to performance gaps.
To reduce and/or eliminate the performance gaps between MHFs and FHFs, it is required
that policy implementers introduce measures to overcome FHFs limited access to productive
and economic resources such as land, credit and loans, equipment and tools, and technical
know-how. To achieve this reduction and/or elimination, FHFs need to improve important firm
resources and participation in networks. The area of firm resources involves not only such
things as human resources and tangible resources but also human resource development (HRD)
in their strategic plans. This means that FHFs should enhance their firm performance by
continuing investment in HRD by updating and upgrading important capabilities and
competencies for female entrepreneurs through training to accumulate know-how, knowledge,
and skills in business operations. It is most important that FHFs be exposed to practical, useful,
and relevant training appropriate to their needs to maximize the outcomes of the investments in
HRD. For example, business training can be in the areas of business management, marketing,
business planning, negotiation, and making contracts. Specific training courses may be in
product improvement, bookkeeping, and the preparation of loan applications. FHFs should also
enhance their performance through the acquisition and/utilization of credit to finance strategic
business activities, such as financing advanced technology to improve productivity, quality, and
product innovation. In this way, FHFs can maintain a competitive advantage and sustain
superior performance. In the area of network participation, FHFs should be involved in
membership of various related business associations such as Lao Young Entrepreneurs
Associations, Associations of women entrepreneurs, and the Vientiane and Business Women
Association. FHFs also must adopt advanced ICT tools to be competitive and to fully exploit
their potential benefits.
6.2.2 Policymakers
Policymakers should encourage a good business climate for the Lao MSMEs business
sector. This should be achieved by the provision of support for both MHFs and FHFs, but
special assistance is required for FHFs because of their significant contribution to the Lao
economy as owners/managers. FHFs need support to be competitive with MHFs.
Under the current conditions, the government can reduce the gender gap in terms of
economic performance by providing incentives and good conditions for FHFs to access firm
resources (human resources and tangible resources) and networks. This should result enhanced
competitiveness. With regards to human resources, the government needs to improve formal
education and integrate vocational education and related training systems with a focus on the
needs of the labor market, in particular the needs of MSMEs. More specifically, they can
169
subsidize HRD for FHFs and provide practical, useful, and relevant business training, advice,
and counseling to enable female entrepreneurs to understand financing mechanisms and
procedures. There should be assistance in the preparation of feasibility studies and business
plans that are acceptable to lending institutions. Furthermore, the governments should
disseminate information about existing sources of business training and credit availability to
female entrepreneurs. The government should not only support the establishment of bank
branches in all provinces, but also help to channel funds to female MSMEs via banks, micro
financial, and rural financial institutions. Moreover, they should provide technical assistance
such as sound advice in the maintenance of financial records and preparation of loan
applications. They should, too, subsidize FHFs in the acquisition of advanced technology via
suitable tax policies. This policy measure can encourage FHFs to introduce new products and
services as well as improve productivity and the quality of goods and services. Furthermore, the
government should stimulate soft infrastructure by encouraging FHFs to become members of
relevant business associations and networks as listed earlier. The government can additionally
encourage FHFs to adopt advanced ICT through means such as tax subsidies and tax
exemptions, so as to for lower the costs of ICT.
7. Limitations and further research
Due to limitations regarding secondary data, this paper could only measure the firm
performance by the annual sales turnover. Further research should include comprehensive
performance indicators such as return on assets (ROA), return on sales (ROS), and sale growth.
In addition, this paper only included reputation as a proxy for intangible resource variables.
Further research should include different intangible resources variables. This paper did not
include personal life issues of MHFs and FHFs such as personal and family factors. Further
study should cover these factors. Lastly, this paper did not consider non-economic performance
indicators. The inclusion of these may provide more meaningful empirical studies and future
research may adopt the mentioned performance indicators.
Acknowledgements
The authors express sincere gratitude to the editors and to several anonymous reviewers for
their helpful suggestions and their valuable comments to improve this paper. Special thanks to
the German Agency for Technical Cooperation (GTZ) that provided some data from their
surveys in 2005, 2007, and 2009. Any errors that appear in the present paper are entirely the
authors responsibility.
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Asia Pacific Management Review 17(2) (2012) 145-175

Corresponding author. E-mail: sengaloun777@yahoo.com

S. Inmyxai, Y. Takahashi / Asia Pacific Management Review 17(2) (2012) 145-175

theories as significant impacts of controlling resource endowments were expected to be

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S. Inmyxai, Y. Takahashi / Asia Pacific Management Review 17(2) (2012) 145-175

S. Inmyxai, Y. Takahashi / Asia Pacific Management Review 17(2) (2012) 145-175

S. Inmyxai, Y. Takahashi / Asia Pacific Management Review 17(2) (2012) 145-175

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inconsistent accounting practices by firms or even to managerial manipulation for different

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Firm size, firm age and industry sectors

Male entrepreneur is represented by 1 while female entrepreneur

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(undergraduate) and post-graduate.

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business clubs, womens business groups, provincial chamber of

5. Analysis and Discussion

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5.2 Results of analysis and discussion

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Table 2. Respondents demographic information for MHFs and FHFs

Some primary school

Completed primary school

Lower secondary school

Upper secondary school

0-10 years old

11-20 years old

21-30 years old

31-40 years old

41-60 years old

Firm Size (No. Employees)

Variance inflation factor (VIF) ranges from 1.049 to 1.531

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Table 3. Means, standard deviations and correlation matrix

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Table 4. Effects of firm resources (Condition 1)

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Table 5. Effects of firm resources and firm performance

Training for employees

*** Significant at 1%; **5%

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Table 6. Summary of results to support H1

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Table 8. Effects of networks and firm performance

*** Significant at 1% ; **5%

Table 9. Summary of results to support H2

Four conditions must be met:

MHFs (gender) must be positively related to network 0.468***

Network must be positively related to firm 0.355*** 0.174*** -0.055

*** Significant at 1% ; NWP = Network participation; ICT = Information communication technology;

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Table 10. Effects of operation factors (condition 1)

Significant at 1% ; **5% ; PB = Premises for business; OPM = Operation months; PC = Presence of

Table 11. Effects of operation factors and firm performance

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Table 12. Summary of results to support H3

Four conditions must be met

* Significant at 1%; 5%

* Significant at 1% ; 5%

Network must be positively related to firm 0.355* 0.174* -0.055