Supporting Women’s Entrepreneurship in Moldova Review, Assessment, and Recommendations Moldavija INDD Final.indd 1 16-Mar-18 10:22:31 AM ©2018 International Finance Corporation 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA All rights reserved. January 2018 This work is a product of the staff of the Finance, Competitiveness and Innovation Practice (the “Practice”) of The World Bank Group. The Practice is a jointly-staffed unit of the International Bank for Reconstruction and Development (the “World Bank”) and the International Finance Corporation (“IFC”). The information included in this work, while based on sources that the Practice considers to be reliable, is not guaranteed as to accuracy and does not purport to be complete. The findings and views published are those of the authors and should not be attributed to either IFC, the World Bank, the Multilateral Investment Guarantee Agency (“MIGA”), or any other affiliated organizations (together, the “World Bank Group”). The World Bank Group accepts no responsibility for any consequences of the use of such data. The information in this work is not intended to serve as legal advice. Nor do any of the conclusions represent official policy of the World Bank Group or any of its member institutions. The denominations and geographic names in this publication are used solely for the convenience of the reader and do not imply the expression of any opinion whatsoever on the part any member institution of the World Bank Group concerning the legal status of any country, territory, city, area, or its authorities, or concerning the delimitation of its boundaries or national affiliation. Acknowledgment The Report was prepared under the guidance of Tarik Sahovic, Noa Catalina Gimelli, and Galina Cicanci. We acknowledge Professor Linda Professor Scott, of DoubleXEconomy, who prepared the analysis of the Moldova Gender Enterprise Survey and provided key recommendations in line with the global best practices, as well as Magenta Consulting, for undertaking the enterprise Gender Survey for the World Bank Group. 2 Moldavija INDD Final.indd 2 16-Mar-18 10:22:31 AM TABLE OF CONTENTS EXCECUTIVE SUMMARY PART A: SUMMARY FINDINGS CHAPTER 1; STRATEGIC RECOMMENDATION A. Troubleshooting the Debt Burden B. Improving Government Relations C. Encouraging Business Development D. Supporting Incubators E. Preparing Exit Strategies F. Protecting Ownership/Control G. Building Awareness/Encouragement H. Targeting Industries/Regions I. Creating Networks J. Supporting ODIMM CHAPTER 2: REVIEW OF THE ENTERPRISE GENDER SURVEY 2016 A. Caveats about the sample B. Analytical overview of results C. Industry analysis D. Regional analysis CHAPTER 3: OVERVIEW OF ODIMM A. Overview B. “Gender Neutral” Programs Available to Women C. Women-Focused Programs D. Other Observations PART B: ANALYSIS CHAPTER 4: OUTLINE OF ENTERPRISE GENDER SURVEY A. Introduction B. Methodology C. Limits of the study CHAPTER 5: DATA A. Characteristics of Enterprises B. Characteristics of Entrepreneurs CHAPTER 6: BUSINESS DEVELOPMENT A. Development and Growth B. Changes to Product and Service Lines C. Motivations to Improve the Way of Doing Business CHAPTER 7: BUSINESS ACTIVITY A. Sales and Labor Productivity B. Supplies’ C. Finance D. Buildings and Land E. Use of Information Technology CHAPTER 8: LABOR A. Number of Employees and Ratio of Female Employees B. Training C. Working Arrangements D. Employment CHAPTER 9: BUSINESS ENVIRONMENT A. Perception of the Business Environment B. Obstacles CHAPTER 10: BUSINESS-GOVERNMENT RELATIONS A. Time Spent on Dealing with Government Regulations B. Fiscal Inspection C. Other Inspections D. Licensing Supporting Women’s Entrepreneurship in Moldova 3 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 3 16-Mar-18 10:22:31 AM CHAPTER 11: NETWORKING A. Membership in Business or Professional Associations B. Social Networking CHAPTER 12: PERCEPTION OF FEMALE ENTREPRENEURSHIP APPENDICES List of Figures and Tables: Figure 2.1. Responses to Firm Ownership Question Figure 2.2. Male and Female Industry Concentration Figure 2.3. Number of Firms by Industry and Gender Figure 2.4. Number of Firms by Size and Gender Figure 2.5: Average Sales by Industry Figure 2.6: Effect of Male Outlier in Wholesale Trade Figure 2.7: Annual Sales Results Figure 2.8: Male and Female Performance in Micro, Small, and Medium Firms Figure 2.9: Employee Labor Productivity for Male- and Female-owned Firms Figure 2.10: Percentage of Full-Time Employees who are Female Figure 11: Male and Female Perceptions of Business Environment Figure 2.12: Incidents of Extortion against Women in Past Year Figure 2.13: Need for Improvement in Government Attitudes towards Women Figure 2.14: Attitudes toward Business/Government Environment for Female Entrepreneurs in Agriculture Figure 2.15: Attitudes Ttoward Business/Government for Female Entrepreneurs in Retail Figure 2.16: Performance of Female Wholesalers as Compared to Total Female Sample Figure 5.1. Distribution of Companies Based on Company Legal Form, Type of Company Figure 5.2. Mea Time Companies have been Registered and in Operation, Type of Company, years Figure 5.3. Owners of Companies, Type of company Figure 5.4. Firms Part of a Larger Establishment, Type of Company Figure 5.5. Size of Female Ownership, Average Figure 5.6. Average Number of Managers and Percentage of Female Managers, Type of Company, Persons Figure 5.7. Size of Ownership of Female and Male Business Owners Figure 5.8. Incidence of ownership Acquisition among Female and Male Business Owners Figure 5.9. Incidence of Requiring Funds for Acquiring Ownership of the Firm Figure 5.10. Sources of Funding for Acquisition of Business, Gender Figure 5.11. Main Reasons to Start Entrepreneurial Activity, Gender Figure 5.12. Incidence of Owner being the Top Manager of the Firm, Gender Figure 5.13. Average Age of Entrepreneurs, Gender, Years Figure 5.14. Education Level of Entrepreneurs, Gender Figure 5.15. Marital Status of Entrepreneurs, Gender Figure 5.16. Incidence of Entrepreneurs having Children, Gender Figure 5.17. Average Age of Youngest Child, Gender, Years Figure 5.18. Childcare Arrangements for Children under 12, Gender Figure 6.1. Main Development Goals, Type of Company Figure 6.2. Orientation of Growth, Type of Company Figure 6.3. Changes of the product/service line in 2016, Type of Company Figure 6.4. Primary Motivation to Improve Business, Type of Company Figure 7.1. Average Sales in 2016, Type of Company, MDL Figure 7.2. Type of Sales in 2016, Type of Company Figure 7.3. Main Market on which Companies Sold their Main Product, Type of Company Figure 7.4. “Incidence of Establishment Competing against Unregistered or Informal Firm, Type of Company Figure 7.5. Origin of Material Inputs and Supplies, Type of Company Figure 7.6. Material Inputs or Supplies Purchased in 2016 Provided from Unregistered Firms, Type of Company Figure 7.7. Sources of Working Capital, Type of Company Figure 7.8. Incidence in Fiscal Year 2016 of Establishment Purchasing of any nNew or Used Fixed aAssets, such as Machinery, Vehicles, Equipment, Land or Buildings, type of Company Figure 7.9. Amounts Spent on Acquisition of Fixed Assets, Female-owned Companies, MDL Figure 7.10. Sources of Finance for Acquisition of Fixed Assets, Type of Company 4 Moldavija INDD Final.indd 4 16-Mar-18 10:22:31 AM Figure 7.11. Incidence of Establishment having a Line of Credit or a Loan from a Financial Institution, Type of Company Figure 7.12. Financial Institutions that Offered Loans, Type of Company Figure 7.13. Incidence of the Most Recent Line of Credit or Loan, Requiring Collateral, Type of Company Figure 7.14. Forms of Collateral, Type of Company, % Figure 7.15. Value of the Collateral, Type of Company Figure 7.16. Incidence of the Owner or Owners of the Establishment having any Outstanding Personal Loans that are Used to Finance the Establishment’s Business Activities, Type of Company Figure 7.17. Incidence of Establishment Applying for any Lines of Credit or Loans, Type of Company, % Figure 7.18. Reasons to Not Apply for a Loan Figure 7.19. Results of 2016 Loan Applications Figure 7.20. Status of Buildings Occupied by Businesses, Type of Company Figure 7.21. Incidence of the Firm’s Activities ever Having Been Conducted on Residential Property, Type of Company Figure 7.22. Status of Lands Used by the Businesses, Type of Company Figure 7.23. Purposes for Uses of Computers, Type of Company Figure 7.24. Incidence of Firms Using E-mail to Communicate with Customers, Type of Company Figure 7.25. Incidence of Establishment Having its Own Website, Type of Company Figure 7.26. Incidence Iin 2016, of Establishment Using any Online Platforms to Conduct Business with Customers’ Suppliers, Female-owned Companies Figure 8.1. Number of eEmployees, Number of Female Employees, Type of Company, Persons Figure 8.2. Incidence in Fiscal Year 2016, of Establishment Having Formal Training Programs for its Permanent, Full-time Employees, Type of Company Figure 8.3. Percentage of Female and Male employees Trained, Type of Company, % Figure 8.4. Incidence during the Last Two Fiscal Years of Attending any Training to Improve your Professional/Managerial Skills, Female Respondents Figure 8.5. Incidence of Establishment Offering Flexible Working Hours, Type of Company Figure 8.6. Incidence over the Last TwoyYears, of Establishment Hiring any Employees, and of hiring a women, Female-owned Companies Figure 8.7. Incidence Over the Last Two Years, of Establishment Hiring any Employees, and of hiring a woman, Male-owned Companies Figure 9.1. Perception of the Business Environment, Type of Company Figure 10.1. Amount of Top- Management Time Spent on Procedures Imposed by Government Regulations Figure 10.2. Incidence Over the Last Year, was this of Establishment Being Visited or Inspected by Tax Officials, Type of Company Figure 10.3. Incidence in any Inspections by Tax Officials or Meetings of a Gift or Informal Payment Expected or Requested, Type of Company Figure 10.4. Establishment Being Visited or Inspected by Other Regulatory Authorities (Sanitary Inspection, Quality Inspection, Fire inspection, and so forth Figure 10.5. Incidence in any Inspections or Meetings by Other Authorities of a Gift or Informal Payment, Expected or Requested, Type of Company Figure 10.6. Incidence Over the Last Two Years, of Establishment Submitting an Application to Obtain an Operating License, Type of Company Figure 11.1. Incidence in 2016, of Establishment Belonging to a Business Association, Chamber of Commerce, or other Professional Associations, Type of Company Figure 11.2. Incidence in 2016, of Using Membership in Associations for Business, Female-owned Firms Figure 11.3. Incidence in 2016, of Using Membership in Associations for Business, Male-owned Firms Figure 11.4. Frequency of Attending Events Organized by Business Associations, Type of Company, Times Figure 11.5. Incidence of Using Social Networks to Connect with Other Entrepreneurs, Gender Figure 12.1. Incidence of Thinking that Women Entrepreneurs Possess Other Characteristics in Comparison with Men in Business, Gender Figure 12.2. Incidence of Thinking that Female Enterprises Need Special Attention of the Government and Local Officials, Gender Figure 12.3. Incidence of Knowing any Government Initiatives to Support Female Enterprises, Gender Tables: Table 4.1. Sample dDesign Table 4.2 Final sSample Table 4.3 Interview Conversion, Interview Refusal, Rate of Unobtainable, Ineligible, and Out of Target Companies Table 5.1. Average Number of Employees when the Business was Set Up, Type of Company, Persons Table 7.1. 2016 Sales as Percent of 2014 Sales, Type of Company Table 7.2. Labor Productivity, Type of Company, MDL/hour Table 9.1. Perception of Obstacles to Conduct Business, Female-owned Companies Table 12.1. Opinion Regarding Level of Success of Female Entrepreneurs in Comparison with mMale Entrepreneurs, Gender Table 12.2. Agreement with Factors that would Stimulate the Development of Female Entrepreneurship, Gender Appendices: Appendix A.1. Mean, Median, Lower Quartile and Upper Quartile Values for Sales of Enterprises, MDL Appendix A.2. Mean, Median, Lower Quartile and Upper Quartile Values for Amounts Spent on Acquisitions of Machinery, Vehicles or Equipment, MDL Appendix A.3. Mean, Median, Lower Quartile and Upper Quartile Values for Amounts Spent on Acquisitions of Land and Buildings, MDL Supporting Women’s Entrepreneurship in Moldova 5 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 5 16-Mar-18 10:22:31 AM WOMEN’S ENTREPRENEURSHIP IN MOLDOVA EXECUTIVE SUMMARY The report presented here, “Supporting Women’s Entrepreneurship in Moldova,” provides an overview of the conditions in Moldova for female-owned businesses, assesses progress made by the Organization for Small and Medium Enterprises Sector Development (ODIMM), and gives strategic recommendations. Policy objectives This work was conducted in support of an ongoing effort to stimulate entrepreneurship among women in Moldova. Currently, female- owned businesses represent only about 25 percent of all Moldovan enterprises. Engaging a country’s entire population to support growth is an important development strategy for nations. However, the benefits of recruiting and supporting women in entrepreneurship have particular appeal in those countries where female inclusion in the economy is low and where problems are visible that typically result from the economic disadvantaging of women. Specifically, encouraging entrepreneurship for women holds promise in Moldova because a successful program would: • Stimulate economic growth; • Create jobs, especially for women; • Provide avenues for advancement of women within the private sector; • Promote economic diversity and stability; • Provide for families, especially children of both sexes and female-headed households; and • Tackle pressing social problems such as reduced fertility, domestic violence, and human trafficking by addressing the economic vulnerability of females Project goals • Outline the key differences in issues faced by male and female entrepreneurs and measure the key obstacles for women entrepreneurs in Moldova. • Uncover key knowledge gaps among women entrepreneurs concerning the regulatory framework in Moldova. • Provide key policy recommendations for the government/Ministry of Economy on actions that would support women entrepreneurs and could inform the future ODIMM’s women entrepreneurship program. • Establish a baseline for a potential panel that will make it possible over time to analyze changes in the business environment. • Stimulate systematic policy dialogue regarding the business environment and help shape the agenda for reform. Report Purposes This report offers an assessment of the current conditions for female entrepreneurs in Moldova, including a review of the activities that support women-owned businesses, areas of high business performance, and barriers that keep women from growing their businesses. The report also outlines strategic recommendations for prioritizing and resolving key challenges. The findings and recommendations are based primarily on the data collected and analyzed through the Enterprise Gender Survey, which is discussed in the second part of this document. These data reflect, as accurately as possible, the current business environment for female entrepreneurs. The survey results compare male and female responses and highlight regional and industry variations. These data cover a wide range of topics from startup and sales performance, to hiring practices and interaction with government officials. Data collection and analysis The analysis and assessment presented in the report are based on the results of the Enterprise Gender Survey, conducted in Moldova during 2016. The methodology and survey were developed by the World Bank, and the dataset was constructed from a sample of registered businesses provided by the National Bureau of Statistics. Following the initial analysis of the data, a dialogue between Professor Linda Scott of DoubleXEconomy and analysts from Magenta Consulting resulted in the creation of industry- and region-specific data subsets. These subsets, in conjunction with field work and secondary data, were used to produce an analysis that explains the performance and specific challenges of women business owners in seven sectors. This analysis is the basis for the recommendations provided in this report. 6 Moldavija INDD Final.indd 6 16-Mar-18 10:22:31 AM Analytical framework Because the Enterprise Gender Survey was comprehensive and captured many facets of female entrepreneurship in Moldova, it lent significant depth and breadth to the strategic analysis presented in this report. This facilitated the creation of a coherent picture of each industry and region by analyzing all responses on a vertical, industry-specific basis, rather than horizontally across all respondents. The reasons for taking an industry-specific approach relate to the global pattern emerging among women entrepreneurs. Existing studies in other locations, as well as nation-level datasets, show that a predictable set of constraints has held female entrepreneurs back: a disproportionate burden of family care, lack of access to capital, formal and informal barriers that keep women from entering more lucrative industries, negative cultural attitudes, unfair treatment by banks, and greater vulnerability to government corruption. However, the relative impact of each of these barriers varies by industry. For instance, the ability to command capital is more important in industries that are capital intensive. Government corruption is more likely to be problematic in industries relying on import/export and those requiring frequent inspections. Furthermore, to the degree that industries are concentrated in particular regions and that relevant infrastructure varies by industry, these types of barriers for women can also vary in their impact. Therefore, this analysis sought to capture the impact of known barriers to female entrepreneurship by industry and region. Summary of current conditions The report’s overall strategic assessment of the current extent of women’s entrepreneurial engagement suggests that further investment in women-owned businesses by Moldova is warranted. For example: women-owned businesses already produce higher average annual sales in three of seven industries, and, on average, employ more people. Women-owned enterprises show higher labor productivity than male-owned companies in four of seven industries. Female-owned firms are much more likely to provide employment and advancement for other women than male-owned firms. Despite these strong overall trends, however, growth from 2014 to 2016 among female-owned firms was lower than that of male-owned firms in four of seven industries. Other evidence in the report suggests that this trend can be reduced by a targeted policy effort. For example, there are indicators that attitudes of government officials, and even corruption, are having a disproportionate dampening effect on female entrepreneurs in some industries and regions. Similarly, evidence clearly suggests that banks are treating females unequally, with particularly negative effect in some industries. Improvements in these areas could contribute to the growth of female-owned firms. One special concern identified in the survey is an apparent trend across industries and regions: women are losing ownership and control over their businesses to men, likely because of indebtedness and lack of access to equity capital. Survey respondents, including males, showed considerable support for the notion that the government should intervene to assist female entrepreneurs; they also agreed that negative attitudes among officials are the biggest barrier facing these women. Although efforts to increase the number of women-owned startups should continue, the evidence reviewed here suggests the need to assist female owners of existing businesses to overcome persistent barriers is equally urgent. Role of ODIMM ODIMM, charged by the government with supporting women’s entrepreneurship, has acquired a solid list of competencies, achieved a number of tangible results, and built a unique network of women across Moldova. This report reviews these accomplishments and recommends further support be provided to expand and deepen ODIMM’s ability to serve this important economic segment. In brief, it is recommended that ODIMM’s funding continue but also be augmented so that the organization’s capacity and range can grow, specialized programs aimed at the industry and regional issues analyzed here can be undertaken, and ODIMM’s relationship with the government can remain in place. Supporting Women’s Entrepreneurship in Moldova 7 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 7 16-Mar-18 10:22:31 AM Part A: Summary Findings 8 Moldavija INDD Final.indd 8 16-Mar-18 10:22:43 AM CHAPTER 1 - STRATEGIC RECOMMENDATIONS The analysis of data provided by the Enterprise Gender Survey, as well as a field visit to Moldova, forms the basis for this set of strategic recommendations. In the chapters that follow this one, the facts and figures supporting these recommendations will be laid out and explained. A. Troubleshooting the Debt Burden Banking and financial institutions worldwide tend to be inhospitable toward women and it does not appear that the situation is any different in Moldova. In several industries, it appeared that women were being given much less favorable terms than men and were struggling with a higher debt burden. In Moldova, as elsewhere, women appear to be shying away from taking advantage of financial training offerings, as evidenced by their relative absence in such programs offered by ODIMM. An apparent negative attitude toward financial literacy may well be fueling some of the bad experiences that women are having with debt. However, it seems unwise to adopt a policy of just waiting for women to undergo financial training to deal with the clear presence of a problem in existing businesses, particularly those owned by women. Instead, it is recommended that a trouble-shooting advisory service for mature businesses under financial stress be instituted. It would be optimal if this service had low- or no-interest funds or even grants that could be used to relieve the stress on businesses that are otherwise performing well. There are quite a few such firms, especially in agriculture and construction. In addition, the banks need to be trained to deal with women more equitably and to be held accountable for fair treatment. There are programs through the International Finance Corporation (IFC) that provide gender training for banks and that provide risk-sharing loan facilities. Inquiries should be made about participation in these programs. Moldovan banks, like banks everywhere, do not sex-disaggregate their data and therefore do not know and cannot report amount of the representation of women in their portfolios nor whether the terms are systematically different between men and women. Especially given that the administration of the loan guarantee fund administered by ODIMM is going to shift to the banks, a mechanism should be set up to monitor and report the gender balance in both loans and terms. It is a good opportunity to institute a change that should later be scaled up throughout the banking sector. At the same time, there appears to be a need for a new approach to the interaction between banks and women in startup situations. Because so many mature businesses owned by women appear to have begun with a bank loan that eventually proved overly burdensome, it would be wise to consider shifting to grants programs for women at the startup phase. The data suggest strongly that such an investment would pay off. Financial training should continue, but should be done in women-only groups. Globally, the evidence suggests that stereotype threat plays a big role in the attitudes and performance of women in financial training. Some of this comes from the male teachers and students, who often hold attitudes that women “can’t do finance.” This problem can be eliminated by offering female-only courses, something that may well improve women’s participation levels, as well as their level of learning. In particular, financial training and trouble-shooting efforts, as well as monitoring of banks, should begin in the agriculture and construction industries. Regionally, this problem seems most intense in the South. B. Improving Government Relations Both male and female respondents to the Enterprise Gender Survey consistently placed officials’ poor attitudes toward female entrepreneurs at the top of the list of improvements that should be made. General cultural attitudes were also high on list. However, while it is difficult and expensive to try to change pervasive norms, a more targeted effort can be made to affect government attitudes. Training for government officials might help, but accountability and incentives are usually more effective to deal with this particular problem. An online survey that can be completed anonymously by woman, after each inspection or other encounter, would provide data on individual government officials that could be used to hold them accountable and reward them for good treatment. Such data could also be used to track and troubleshoot problems by industry and region. Bribes seem to be a big problem, especially in wholesaling and retailing, and they are disproportionately adversely affecting women. It may be that customs agents, in particular, are misbehaving and causing a bottleneck. A trouble-shooting team could be organized and deployed, as needed, thus giving individual women assistance and putting the customs agents on notice that they need to improve this situation. Supporting Women’s Entrepreneurship in Moldova 9 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 9 16-Mar-18 10:22:43 AM C. Encouraging Business Development The data from the Enterprise Gender Survey show that women in some industries are outperforming the men on various measures of business development behavior, including membership in groups, product/service innovation, and use of online tools. Where the women are underperforming, the disparity is quite dramatic and virtually always occurs in a situation where the women are significantly distressed, such as in the construction industry and in the southern region. Such women may not have either the bandwidth or the cash to spend on business development. They report that they are in survival mode. Thus, rather than focus on trying to stimulate innovation and networking, it may be more effective to focus first on relieving distress, as the discussion in previous sections of this report on trouble- shooting debt and reforming customs suggest. D. Supporting Incubators Incubator mechanisms hold particular promise for stimulating female entrepreneurship, but adjustments are in order. Women’s businesses grow more slowly at the early stage, so some form of subsidy that allows them to pay reduced rent longer would act as an encouragement for women to start businesses and would also incentivize incubator managers to recruit women. Offering high quality, low cost childcare on site, specifically for children 0-3 years old, would probably be the most powerful lever possible in attracting young women to be new entrepreneurs. Childcare availability and women’s economic engagement are highly correlated—and it really matters most in those early years. Furthermore, low birth rates and lack of support for mothers are also highly correlated. Early childcare could be especially attractive to migrants, as their destination countries are offering insufficient services (which is why birth rates in these countries are dropping even lower than those in Moldova). Rather than take on a country-wide, expensive program of daycare, it might be more efficient (and productive) to test and ease into programs in the incubators. E. Preparing Exit Strategies Certain subgroups of female entrepreneurs indicated in the Enterprise Gender Survey data that they are reaching a point where they need to sell, shut down, or bequeath their businesses because of advancing age. Rather than have these going concerns be liquidated, it would be better to provide advice, even a potential match-making service to help these women leave their businesses in a way that transfers their value fairly and, perhaps, even provides a pension for them. These services could prioritize the transfer of ownership to other females, in line with the overall goal of growing female entrepreneurship nationally. The effort should start with hotel/restaurants, where the women are not only older, but have built successful businesses using assets acquired through privatization. These businesses seem likely to be attractive because of high income streams and, probably, low debt. F. Protecting Ownership and Control A service that could be coupled with either financial trouble-shooting or advising on exit strategies could provide advice on negotiating sales of shares. Women negotiate very well when they are negotiating for others, but gender stereotypes work against them in monetary negotiations on their own behalf, which often means they sell themselves short. They also may not be aware of alternatives that could relieve pressure to succumb to poor terms. Enabling women to retain ownership and control helps both female entrepreneurship and female employment/advancement, so it would be well worth the investment. G. Building Awareness and Encouragement Awareness of government programs designed for women business-owners was remarkably low across the board. An awareness effort must be undertaken. Rather than institute a media campaign, however, it would be more effective and efficient to spend money on expanding the National Women’s Platform, both online and in face-to-face events. In-person meetings would be a particularly effective way to introduce role models who could appear human, down-to-earth, and “just like you.” Mediatized female entrepreneurs often only discourage the audience because they seem too rich, glamorous, educated, or beautiful to represent something that “ordinary women” can realistically accomplish. It would be better to present at in-person gatherings similarly “ordinary” women who have been successful which could also facilitate helpful questions and answers. At these same meetings, the women should be presented with some of the success data revealed in the results of the Enterprise Gender Survey. Stereotype threat, which is the likely source of their discouragement, is not really solved by individual role models as well as it can be by presenting an empirically-based, but broadly-construed picture of feasibility. 10 Moldavija INDD Final.indd 10 16-Mar-18 10:22:43 AM H. Targeting Industries and Regions Rather than focusing entirely on one-size-fits-all programs, specific industries and regions should have interventions targeted to their particular needs. In many cases, beginning with a bespoke program would allow testing that could be rolled out. For example, an exit strategy advisory begun in the hotel-restaurant industry could be rolled out to other industries in which women age to the same point where hoteliers and restaurateurs are now. Urgent situations are identifiable in the Enterprise Gender Survey data and timetables should be adjusted accordingly. Women in the South and in wholesaling businesses should be prioritized. Women in the South are in distress and need immediate attention. Women in wholesaling are producing very well, but are measurably demotivated—their potential to excel should be encouraged by targeted inquiries and attention, especially in the area of government corruption. Women in agriculture are doing well, but ODIMM has reported that they could use supplemental agricultural training, for instance in such areas as crop rotation. In fact, a very good idea is to construct an online database (for both men and women) that would list crops, their cost, their yield, their time to fruition, and so on. Women in manufacturing are the ones who seem to need the most technical assistance. They seem to be working in a manner that is too labor-intensive and they are also probably not current on international trends. Efforts to bring machines and outside inspiration to these women would likely pay off well. Financial problems are worst in construction and in the South, but are also pronounced in agriculture and retail, as well as in the North. I. Creating Networks Creating networks among women that could allow them to buy from, sell to, and get advice from each other across industries and regions would also likely be a positive stimulus, as it can help work against protectionist behaviors on the part of men. Such networks can help women entrepreneurs dispel unfair images – often perpetuated by men – that women are “incompetent.” However, one particular area where women do need training and improvement is in financial management. Overall, the mature woman business owners have already taken steps to undergo training to in any skills gaps they have and because of their demonstrated abilities, could assemble a good pool of collective ability to be shared through a network. Such a network could also provide means for a dialogue between government and women-owned enterprises. The National Women’s Platform initiated by ODIMM seems perfectly positioned to fulfill this role. J. Supporting ODIMM ODIMM’s achievements should be rewarded with further investment. These recommendations are supported by the analysis of ODIMM later in this report. The following actions are recommended with specific regard to ODIMM. • ODIMM’s funding should continue and be augmented. • ODIMM should retain its current relationship with the government. • ODIMM should assume responsibility for managing all grants and programs relevant to women’s entrepreneurship coming under the aegis of the national government. • ODIMM should carefully develop its existing network and platform in order to facilitate communications and information flow between female businesswomen and the government. • Investment should be made in training, developing, and expanding ODIMM’s women’s entrepreneurship team. • Additional support should be awarded to facilitate the integration of ODIMM’s women’s team into the global community working for women’s economic empowerment, specifically in order to help build connections that could lead to further programs and funding. • New targeted modules should be funded and developed under the Women’s Business Academy program, as described in this report. • An online tool should be implemented for ODIMM to be able to interact with and monitor banks that are handling the loan guarantee program. • ODIMM should take special responsibility for monitoring and facilitating the access of female entrepreneurs to capital and markets. • An increased awareness-raising budget should be awarded to ODIMM • ODIMM should also be provided with research funds. Their own contact with the entrepreneurship community, especially through the National Women’s Platform, could be tapped to fill in information lacking in the Enterprise Gender Survey (such as early stage businesses), but could also be harnessed to get more information on problems occurring in specific industries and regions. Supporting Women’s Entrepreneurship in Moldova 11 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 11 16-Mar-18 10:22:43 AM CHAPTER 2 - REVIEW OF THE ENTERPRISE GENDER SURVEY 2016 This chapter analyzes the results of the Enterprise Gender Survey Moldova 2016, completed in September 2017. This analysis provides a gender perspective, with an eye toward identifying the impact of typical constraints on women entrepreneurs: relative time poverty, less access to capital, informal and formal barriers to industries and markets, vulnerability to government corruption, unequal treatment by banks, and negative cultural attitudes toward women’s economic engagement (see “Women Entrepreneurs: Special Challenges” in Chapter 3). Each of these factors tends to have a differential influence by industry. For instance, lack of access to capital has a bigger impact in capital-intensive industries. Similarly, constraints specific to a given region may affect women differentially. For instance, in this sample, firms acquired by inheritance or privatization fall disproportionately to women in distinct regions. So, this report will include analytical breakdowns for regions and industries. A. Caveats about the Sample The sample for this report was drawn from government records of officially-registered businesses. Because this database included only registered businesses, it has the following biases: • Informal businesses are not included • Early stage businesses that have not yet been registered are not included • Failed businesses are not included These omissions mean that the sample is potentially skewed toward older, established, formal, and often successful businesses. These businesses will, for the most part, have already survived the early business challenges that government support programs are usually designed to address. Thus the sample would not be representative of the kinds of businesses mostly likely to be addressed by ODIMM. There were significant problems with nonresponses in data collection (as described in the report itself) and this may also have affected the final sample. It may also be skewed in ways that are now nearly impossible to discern. Indeed, the sample’s characteristics tend to suggest that the firms and owners are, if not atypical of Moldovan businesses, unlikely to be typical of start-up entrepreneurs. Specifically, the sample mostly shows: • Owners who are at a settled stage of life, specifically those with children who no longer pose burdens that would interfere with the enterprise work, as well as being more likely to be married than people in the population at large; and • Owners of businesses that display hallmarks of highly developed and stable firms, such as lines of credit, ownership of their land and buildings, substantial numbers of employees, and so forth. Of particular concern is that the average age of the youngest child among the women in the sample was sixteen years old. Particularly at the startup or micro-level, the question of childcare among young women is critical, but because of the nature of this sample, the magnitude of the issue could not be determined. Perhaps the most unfortunate problem in the sampling approach is not reflected at all in the Enterprise Gender Survey report. Interviewees were qualified to participate in the survey as long as they held some leadership position in the company. Each interview began with a question about whether the respondent was an owner of the business. Among the respondents of male-owned businesses, a very high percentage (94 percent) answered that they were, indeed, owners of the company. However, a very low percentage (31 percent) of female respondents were owners. (See Figure 2.1). 12 Moldavija INDD Final.indd 12 16-Mar-18 10:22:43 AM Figure 2.1: Responses to Firm Ownership Question Opening Question: Are You an Owner of the Firm? 120 100 99 100 96 96 92 92 80 86 88 60 40 40 35 34 20 22 19 8 0 Agriculture Manufacturing Wholesale Retail Trade Construction Hotel/Resaurant Services Trade FEMALES % Answering Yes MALES % answering Yes The survey next asked the owner-respondents who answered affirmatively to the first question a series of further questions about the origin of the company, the need for funds at startup, and so forth. One of these questions asked the owners what percentage of the company they owned. This, too, showed a big difference between males (75 percent) and females (61 percent). Nothing in the survey anticipated this major difference between genders in ownership representation. Therefore, there were no further questions asked to explore explored the reasons for the difference, or to provide a basis for determining what this huge skew might mean for a divergent entrepreneurial experience between males and females. It is certainly possible, though it seems very unlikely, that males just randomly appeared for interviews more often than females. No a priori reason seems available to explain such a dramatic outcome except that women have lost ownership more often than men. Furthermore, as will be discussed in this analysis, the answers to other questions in the survey collectively suggest that, indeed, a large loss of ownership by founders of women-owned businesses is likely, especially because (1) indications of distress appear somewhat more often in the industries where the skew in the answer to the ownership question is especially pronounced and (2) somewhat less distress appears in the industries where the female response to the first question is high. Importantly, answers to this sequence overall pointed to a very high level of control, ownership, and leadership on the part of males within male-owned businesses. Unfortunately, male owners were not directly asked what percentage of their company was owned by either females or males, as was asked of the females. Nevertheless, by triangulating the answers from male owner-respondents, one can infer that males continue to own and control businesses to almost total exclusion of women—as either owners or top managers. At the same time, one can also infer that women-owned firms become substantially integrated with male owners and leaders over time. In the end, therefore, it seemed extremely unwise to ignore the enormous skew in the responses to the first question of the survey. Thus, this analytical report does make references to and inferences from that information, although care has been taken to qualify the discussion in light of the potential for the effect to have been random. All these sampling limits should be kept in mind when reading the analysis below. Supporting Women’s Entrepreneurship in Moldova 13 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 13 16-Mar-18 10:22:43 AM B. Analytical Overview of Results This section will analyze the data from the Enterprise Gender Survey results from a gender perspective, assessing barriers and potential for women specifically. 1. Industry and Size Concentrations by Gender In Moldova, women-owned businesses are concentrated, first, in retail trade, followed by services and wholesale trade. Their lowest concentration is in hotels and restaurants, at 4.4 percent of all women-owned businesses, which is less than their representation in construction. (See Figure 2.2). Figure 2.2: Male and Female Industry Concentration Female Industry Concentration Male Industry Concentration (% of All Women - Owned Businesses) (% of All Men - Owned Businesses) 5% 5% Retail trade 5% Retail trade Services Services 7% 26% 32% 20% Wholesale trade Wholesale trade 12% Manufacturing Manufacturing 7% Agriculture Agriculture 18% 9% Construction Construction 32% 21% Hotel/restaurant Hotel/restaurant 1% Men are more concentrated in services than are women; their second largest representation is in retail trade. For both sexes, therefore, the biggest industry concentrations are in retail and services (a total of 58 percent for men and 53 percent for women). Both men and women have a very small presence in hotel/restaurant. The two biggest gender gaps are in wholesale trade, where women vastly outnumber men, and in construction, where the reverse is true. The industry concentrations within genders, however, do not give a full accounting of relative size. Looking at the number of firms, for instance, provides additional insight into which industries are male or female-dominated. Since female-owned firms represent only about 27 percent of all enterprises, we would expect the male-owned firms to be much more numerous across the board, but the industry concentrations show that retail, services, and construction to skew more heavily toward male- domination than in other industries. (See Figure 2.3). Figure 2.3 Firms by Industry and Gender Figure 2.4. Firms by Size and Gender Number of Firms by Industry and Gender Number of Firms by Size and Gender 6,000 14000 5,000 12000 4,000 10000 3,000 8000 2,000 6000 1,000 4000 0 2000 0 Micro Small Medium Female-Owned Male-Owned Female-owned Male-owned 14 Moldavija INDD Final.indd 14 16-Mar-18 10:22:43 AM The difference between male and female presence in entrepreneurship is further illuminated by looking at the number of firms each gender owns at the three size levels studied by the Enterprise Gender Survey report: micro, small, and medium (Figure 2.4). Clearly, the overall percentage of women in enterprise is substantially affected by the very large number of male-owned firms at the micro-level. While these data are cross-sectional, rather than longitudinal, it might be hypothesized that the higher rate of start-up, as well as a likely significant failure rate, for male-owned businesses leaves a big print on the overall gender numbers for Moldovan enterprise. 2. Sales Performance by Gender In 2016, women produced larger average annual sales in three industries: agriculture, construction, and hotels (Figure 2.5). Average annual sales for the whole sample is distorted by a single male outlier in wholesale trade. This outlier affects a number of comparative metrics, including sales, growth, and hiring levels, as well as averages for the sample. Figure 2.5: Average Sales by Industry Average Sales By Industry (MDL, 2016) Female-Owned Male-Owned Agriculture 7,132,553 4,995,293 Manufacturing 3,359,130 5,778,126 Retail trade 1,884,348 2,800,558 Wholesale trade 5,985,489 200,000,000 Construction 5,109,553 2,539,387 Hotel or restaurant 6,094,014 720,000 Services 1,611,260 1,630,563 If the outlier in wholesale trade is eliminated by holding sales for both sexes constant at the female rate, the average annual sales for females, for the total sample, is 130 percent of sales for males (Figure 2.6). Figure 2.6: Effect of Male Outlier in Wholesale Trade. E ect of Male Outlier in Wholesale Trade Average Annual Sales 2016 (MDL) Industry Female - Owned Male - Owned Agriculture 7,132,553 4,995,293 Manufacturing 3,359,130 5,778,126 Retail trade 1,884,348 2,800,558 Wholesale trade 5,985,489 5,985,489 Construction 5,109,553 2,539,387 Hotel or restaurant 6,094,014 720,000 In this table, the men and women were set to equal in wholesale Services 1,611,260 1,630,563 trade to estimate what average Sample Average 4,927,515 3,803,142 sales overall would be for the sample if the outlier in wholesale F/M Index = 130 were neutralized. Supporting Women’s Entrepreneurship in Moldova 15 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 15 16-Mar-18 10:22:44 AM In the hospitality industry, women produced more than eight times the revenue as men. In wholesaling, women underperformed significantly due to the outlier among the men. However, in terms of annual sales, women in wholesale did well compared to both female- and male-owned performance in other sectors. Surprisingly, in construction, women produced considerably more than the males’ average sales, even though females are a distant minority and quite disadvantaged. Women did quite a lot better in agriculture than men did, but produced much less than man in both manufacturing and retail. Sales for women and men were equal, on average, in services, which is one of the top two industry concentrations for both genders, but is also one where annual sales are very low for both (Figure 2.7). Figure 2.7: Annual Sales Results Average Annual Sales 2016 Average Annual Sales 2014 (MDL) (MDL) Female - Male - Female - Growth, Growth, Industry Owned Owned Owned Male -Owned Female Male Agriculture 7,132,553 4,995,293 6,828,261 2,815,894 104 177 Manufacturing 3,359,130 5,778,126 3,732,252 5,342,022 90 108 Retail trade 1,884,348 2,800,558 1,070,583 2,194,691 176 128 Wholesale trade 5,985,489 200,000,000 4,897,777 165,000,000 122 121 Construction 5,109,553 2,539,387 7,080,008 3,065,270 72 83 Hotel or restaurant 6,094,014 720,000 6,811,672 630,000 89 114 Services 1,611,260 1,630,563 1,441,254 2,414,561 112 68 Sample Average 4,453,764 31,209,132 4,551,687 25,293,205 98 123 As can be seen in the Figure 2.7 above, women-owned businesses overall grew less than did men-owned businesses between 2014 and 2016, producing overall flat growth compared to the men’s year-over-year index of 123. Across industries, women grew equal to or more than men in retail, wholesale, and services. It should be noted that, in several industries, women generate much larger annual sales than, as is (highlighted in Figure 2.7 above). Thus, in some cases, the men are growing over a smaller base, but women are contributing more to Gross Domestic Product (GDP). 3. Growth, Ownership, and Control Women account for only about 25 percent to 27 percent of all enterprises in Moldova, but the major explanation for this representation is the very high number of male-owned firms at the micro level a number that appears to imply a dramatic failure rate among companies started by men (see Figure 2.5). The Enterprise Gender Survey data relating to the size of firms is cross-sectional, not longitudinal, but other information in the report suggests that it is reasonable to posit a narrative behind the gender mix in ownership when comparing micro, small, and medium firms. While females do start businesses at a much lower rate than males, female-owned firms appear to be more stable, less likely to fail, as evidenced by the large difference in the number of male owned firms between the micro and small business level. As women-owned businesses in Moldova grow, however, the overall share of female ownership declines to the point whare they lose majority ownership at the medium-sized level. This pattern stands in sharp contrast to the males, who, if their businesses succeed, retain ownership and control through the micro and small stages, only to lose some ownership (but not control) when they become medium-sized businesses. Indeed, as explained in the Chapter 2 section titled “Caveats about the Sample,” nearly all of the male respondents answered that they were owners of their firm, but few of the female respondents did. In the micro and small firms, male respondents said they owned about 90 percent of the shares themselves, dropping to 73 percent for medium-sized companies. Putting these two bits of information together, we can infer that women must own no more that 10 percent of male-owned micro or small businesses and no more than 27 percent of male-owned medium businesses. 16 Moldavija INDD Final.indd 16 16-Mar-18 10:22:44 AM The female share of ownership in the micro and small women-owned firms was lower, such that men might have owned about 20 percent of those companies. However, at the medium level, males have acquired a majority of shares in women-owned businesses (on average, 52 percent). Thus, male influence in Moldovan enterprise is not just in the firms they own or founded themselves, but also in the interests that they acquire in female-owned firms, as the women lose control. It is notable, as well, that the men who responded, who were founders of their company and had close to full ownership of it, were also in nearly all cases the top manager of the company. It is, therefore, crucial to recognize that differences in overall size of companies owned by women versus men may not reflect a propensity to slow growth among women (the usual conclusion that is drawn), but may instead reflect the loss of ownership to men. That’s because any growth such companies attain would be credited as “male-owned businesses” as the firms gained a certain size. In sum, differences in growth may not be a function of business acumen or goals, but of the lesser access to capital implied by the shift in ownership. Based on the other data analyzed here, a few possible reasons for this phenomenon may be conjectured. There seems to be a persistent phenomenon among the women in which their taking of bank credit as funding for start-up seems to burden them in persistent ways. Men are much more likely to have cash to invest in a business up front—indeed, they are much more likely than women to purchase firms (probably buying the firms from women, at least some of the time). The women also seem to struggle with unfair treatment from banks, especially as shown in collateral requirements imposed on women, as well as from government corruption, as shown in practices of requiring bribes. Official attitudes toward women are cited frequently—by men as well as women—as the biggest barrier to success for female entrepreneurs. These official attitudes have practical, business-oriented consequences in the form of higher costs, reduced access to resources, and the like. It may well be that women are more frequently willing to sell—or are forced to sell—because of the greater difficulties they experience, in particular the possibility of over-encumbrance by debt. The reason for loss of company control does not appear to be systematic underperformance on the part of females. Table 2.8 below illustrates the performance of female versus male firms at three stages. Note that up to the “medium” stage, the women produce higher sales, as well as higher levels of employment and productivity. At that size, however, even firms categorized as female-owned firms are, on average, majority-owned by males. So, as best as we can determine, firms that are majority-owned by females perform as well or better than male-owned firms in the early stages (this is consistent with the global pattern). At the medium level, male- owned firms may have higher sales because the more attractive women-owned firms have been acquired by men. However, even more likely is that the outlier in wholesale that was described earlier is determining this number, and thus the women are not being outperformed at all. Figure 2.8: Male and Female Performance in Micro, Small, and Medium Firms Micro Small Medium Average 2016 sales (MMs MDL) F 1.24 6.79 24.5 M 0.99 4.32 53.23 Number of employees F 4 22 100 M 4 15 101 Labor productivity F 63 150 105 M 50 100 147 Growth, 2014 to 2016 F 100 123 118 M 120 100 120 From a strategic perspective, then, the objective should perhaps be as much to help women keep their businesses as it is to recruit new women to start businesses up. Further more, the assumption that there is a skills deficit among the women does not seem to be borne out by the performance data. It appears that when women are able to acquire businesses without debt such as, (through inheritance or privatization), they have a much better chance of staying in control and thriving. Thus, an emphasis on start-up grants rather than credit may be in order. Advisory offerings might be added to focus on mature businesses, helping women to negotiate the stresses of growth. In addition, troubleshooting assistance in situations involving bad debt or government conflict situations may also be a good idea. Supporting Women’s Entrepreneurship in Moldova 17 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 17 16-Mar-18 10:22:44 AM 4. Employment and Productivity Women employ more people than do men in five out of seven industries, ending in a total average number of 12 FTEs versus 10 for men (Figure 2.9). Women’s firms are also more labor-productive, with a mean score of 172 versus 161, outperforming men in four out of seven industries. Figure 2.9: Employee Labor Productivity for Male- and Female-owned Firms Total Current Employees Mean Labor Productivity 2016 Female - Male - Female - Male - Owned Owned Owned Owned All industries 12 10 + All Industries 172 161 + Agriculture 24 15 + Agriculture 145 105 + Manufacturing 22 22 = Manufacturing 81 133 - Retail trade 9 8 + Retail trade 117 102 + Wholesale Wholesale trade 8 104 - trade 382 1132 - Construction 21 10 + Construction 92 59 + Hotel/restaurant 23 4 + Hotel/restaurant 307 90 + Services 8 6 + Services 112 283 - Female entrepreneurs were equally likely to have hired staff in the past two years and were equally likely to have hired women (Figure 2.10). Yet the overall gender picture of employment, across industries, regions, and business sizes, shows that women-owned firms have a higher percentage of female employees than male-owned firms. The exceptions are micro firms and services firms, where the male and female-owned businesses employed equal numbers of men and women. Figure 2.10: Percentage of Full-Time Employees who are Female Percentage of Full - Time Employees Who Are Female Women - Women - Men -Owned Men -Owned Owned Owned Firms Firms Firms Firms Agriculture 33 27 Micro 50 50 Manufacturing 64 41 Small 45 25 Retail 44 38 Medium 43 35 Wholesale 38 34 Chisinau 50 25 Construction 14 10 North 53 42 Hotel/restaurant 74 50 Central 45 33 Services 50 50 South 46 38 Women who own enterprises are also more likely than their male counterparts to train females (81 percent versus 72 percent), while the reverse is true for training males (71 percent of men were trained in female- owned firms versus 85 percent in male-owned firms). Firms owned by men or women were equally likely to offer both flex-time and paid maternity leave. The upshot, however, is that females are far more likely to reach management in firms owned by women; 58 percent of managers are women in firms owned by females versus only 34 percent in companies owned by men. A conclusion that may be drawn from these data is that women are better supported as workers by women-owned businesses than by enterprises under male ownership. In virtually every manner of analysis by size, by region, or by industry the women-owned businesses were hiring, training, and promoting more women than the men were. Furthermore, the pattern in which men retain nearly all control and ownership clearly does not contribute to gender diversity in the enterprise base. 18 Moldavija INDD Final.indd 18 16-Mar-18 10:22:44 AM 5. Attitudes and Outlook Women generally had a less favorable view of their circumstances. The data indicated that they looked more negatively on the business environment, believed more strongly that they deserved more government attention, and feelingfelt more emphatically that changes in government and social attitudes were needed than men did, and that legal changes and support programs were in order (Figure 2.11). Very few women or men were aware of existing government support programs (14 percent versus 18 percent).Even though fewer males than females felt government should be giving special attention to female entrepreneurs (43 percent versus 62 percent), there was considerable agreement about the factors that could stimulate the development of female entrepreneurship, including the following: • Positive attitude of officials toward female entrepreneurship (92 percent of women agree, 72 percent of men agree) • Less traditional attitude of society toward female entrepreneurship (89 percent women, 78 percent men) • Support programs designed especially for women (78 percent versus 71 percent) The least supported suggestion was a change in regulations, though twice as many women agreed with this idea (62 percent) than men (36 percent). Figure 2.11: Male and Female Perceptions of Business Environment Perceptions of Business Evironment Woman Men 30% 49% 70% 51% % Unfavorable % Favorable on nature % Unfavorable % Favorable on nature Women also had a more negative outlook on the business environment generally. Details by industry suggest that difficulties with government, business distress, and a negative attitude toward the business environment dampen activity aimed at growth. Indicators of growth-readiness include having growth as a goal, being willing to innovate, investing in fixed assets, taking on new technology and marketing platforms such as a website, joining trade associations, and the like. Comparing the numbers for these items shows that the industries (and to some extent, regions) where women seem to be doing less than men in the way of business development are also those industries where women are in particular distress, as discussed in the following sections: wholesale, construction, and the southern region, in particular. It is commonly assumed when women are innovating less than men (or vice versa), that the reason is a lack of commitment and imagination. But when business conditions become too dire, when time seems more urgently pressured, when assets are encumbered, and when the money to invest in new products or equipment is too tight, an entrepreneur will have a harder time innovating. In fact, under those conditions, the entrepreneur’s focus must understandably become one of survival. Low innovation and business development, therefore, may be as much a sign of economic distress as it is a no-growth attitude. Supporting Women’s Entrepreneurship in Moldova 19 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 19 16-Mar-18 10:22:44 AM 6. Government Relations Each respondent was asked whether his or her business had been visited in the last year by tax officials and then whether they had been visited by any other government inspectors (such as for sanitation), as well as how often they were visited. In each case, respondents were also asked whether gifts or informal payments had been demanded of them. Overall, except in wholesale trade, the percentages reporting extortion were low. However, the weight of these incidents fell overwhelmingly on the women (Figure 2.12). Figure 2.12: Incidents of ExtortionIncidents of Extortion against Women in Against Women in Past Year Past Year Gift or Payment Gift or Payment Incidents Tax O cials Inspection O cials with Men Manufacturing 19 4 166 Retail 95 100 0 Agriculture 3 13 0 Construction 0 0 0 Services 0 92 8 Hotel/restaurant 2 2 0 Wholesale 185 0 0 Total 304 211 174 A total of 304 women reported that incidents of extortion occurred in the context of tax visits in the past year, while another 211 women reported extortion incidents in another inspection context, for a total of 515 corruption events against women. It is important to note that these incidents occurred within only one year and that many businesses were not inspected at all. In most industries, these types of situations occurred only for women. A noticeably higher incidence occurred among women in wholesale trade, where 66 percent of women with tax inspections that year were asked to pay a gift or informal payment. Notably, 166 men in manufacturing were also asked for informal payments, but not in tax inspections. The data on corruption also shows concentration by region, with the biggest problem in the North, followed by Chisinau. This may be due to the industries represented in those regions. This phenomenon may explain in part why so many men and women pointed to the need for an improvement in official attitudes toward female entrepreneurs as the primary action going point ofAttitudes Government forward. Toward Women(See Figure 2.13) Business - Owners Need Improvement (% Selecting Choice among Items Needed to Foster Female Entrepreneurship) Figure 2.13: Need for Improvement in Government Attitudes towards Women Agriculture Manufacturing Retail Trade Wholesale Trade Construction Hotel/restaurant Services 0 20 40 60 80 100 Men Women Though responses varied by industry and region, women generally felt that female enterprises needed special government attention (62 percent) and believed that government support programs were a good idea (78 percent). However very few were aware of any existing programs (14 percent). Overall, therefore, the data indicated that work is needed in the relationship between government and the community of female entrepreneurs. 20 Moldavija INDD Final.indd 20 16-Mar-18 10:22:44 AM 7. Childcare Availability of care for infants and toddlers is the most important factor for women looking to engage economically. It is particularly noteworthy that the men responding to the Enterprise Gender Survey were so much more likely than women to have help from another parent or relative (43 percent versus 16 percent) in this domain, and the women were much more dependent on institutional care (78 percent versus 56 percent). This problem will fall even more disproportionately on younger women and thus will have a larger dampening effort on startups than on mature businesses. 8. Summary The performance of female entrepreneurs in the Moldovan economy is better than or comparable to men when looking at sales, hiring, and productivity. However, there is a pronounced tendency for women to lose control and ownership as their firms grow, although this may be due to some of the specific constraints that plague women in Moldovan business environments, including: not enough access to capital to maintain ownership and leadership of growing companies; negative attitudes from government and communities; difficulty with bank terms and debt; perceptions of insufficient support; and an unfavorable business environment. Targeted support of existing women-owned businesses could bring their growth rates in line with those of men, thus giving a boost to national GDP. Focusing on support for existing businesses may yield results more quickly and reliably than focusing on recruitment efforts for startup businesses. There is certainly also growth potential from making efforts to attract more women into business. However, if recruiting efforts are to be successful, existing female entrepreneurs must present an attractive picture to those considering entrepreneurship as a path. C. Industry Analysis Moldovan industry sectors have significant differences in the demographics of the women and men in them, sources of initial capital, industry attitudes, and prevalence of corruption. This section will present a brief picture of each industry. 1. Agriculture Female agri-business owners in Moldova are much more successful and engaged than the men. Women farmers produced more annual sales in both years, almost twice what men generated, but sales grew at a slower rate. Women farmers were more likely to export, to employ more people, and had greater productivity. Females were more engaged in developing their businesses through training, group membership, innovation, and use of online platforms. In spite of the better performance of women-owned firms, it appears there may have been a large loss of female control of these firms. Fewer than 20 percent of female respondents told the Enterprise Gender Survey that they were owners of their firm, compared to 92 percent of the male respondents. Similarly, the males were nearly all top managers. Shares of women-owned agri-businesses were 63 percent owned by females, meaning that 37 percent of the shares of these firms are owned by males. Triangulating from the available data, female control of male firms is likely only about 20 percent. About half of top managers in women-owned firms are female-meaning that half of the leadership in women-owned businesses is male. Women were also more likely to have hired female employees. Thus, in agriculture, as in most other sectors, the gender of ownership affects the gender profile of whole company, but the effect of male ownership is much stronger, producing a picture that is far more exclusionary. A core problem, one that may have affected ownership, is the use of debt as capital. Women were more likely to have used commercial loans to start up, to have had more lines of credit, and were more likely to have funded fixed- asset purchases with debt. Women and men own their land and buildings to about the same degree, but these assets are probably more encumbered among females. Almost twice as many women as men reported pledging land as collateral and many more had pledged their fixed assets. The debt burden on women farmers is made worse by their credit terms, which are dramatically less favorable than men’s.: For example, women had pledged 183 percent of the value of their most recent loan, while men pledged only 134 percent. The women were also twice as likely to complain about interest rates, which may indicate their rates are higher. This is occurring despite the higher sales and larger size of the women’s firms. The cause could be discrimination, but it may also be that the women’s firms are already more encumbered, causing bankers to demand more collateral and chargingcharge higher interest rates. Supporting Women’s Entrepreneurship in Moldova 21 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 21 16-Mar-18 10:22:44 AM Attitudes Toward Business/Government Environment for Female Entrepreneurs in Agriculture Figure 2.14: Attitudes Toward Business/Government and female) for Female Entrepreneurs in Agriculture Environment (% agreeing, male More positive o cal attitudes needed 100 toward female entrepreneurs 98 Improved regulation needed 88 to help women-owned businesses 54 Female entrepreneurs need 75 special government attention 84 Unfavorable attitude toward 70 business environment 89 0 20 40 60 80 100 120 Male Female Both sexes in agriculture had a more unfavorable view of the business environment than business-owners in any other industry except hotel/restaurant (Figure 2.14). Both were also in agreement, at very high levels, that government should pay more attention to female entrepreneurs, that official attitudes toward them need to improve, and that legal regulations, as applied to women, should be improved. There was also demand for support programs, but little awareness that such programs already exist. 2. Manufacturing Survey results indicate that Ffemale manufacturers perform less well than the men: annual sales are lower, labor productivity is less, and growth trends are negative, while at the same time males are experiencing growth. Of men answering the questionnaire, 86 percent were owners.; iIn contrast, only 35 percent of the female respondents were owners. Male owner-respondents held 85 percent of shares, while female owners held 70 percent. While 64 percent of female firms had women in management positions, only 43 percent of the male-owned companies did. As in agriculture, the goal of employing and progressingpromoting more women is likely to be more easily achieved by investing in women-owned manufacturing businesses. Women do seem to be taking the lead in terms of business development. Neither sex is likely to belong to a trade group, but women are far more likely than the men to seek professional and business training (67 percent versus 23 percent). Men and women are equally innovative in terms of product offerings, but women are twice as likely to have a website, to use computers more broadly, and are much more inclined to use online platforms to reach customers and suppliers. Women are also more likely to sell internationally and nationally than men, who tend to focus more locally. A problem for female manufacturers may be that they have been in less stable financial condition, beginning from the opening of their businesses. Women were more likely to have required funds than men were at startup and much more often filled the need with a loan from a commercial bank. Men had more savings and their families or friends were more likely to help. However, currently, women and men have about the same levels of land/building ownership, have similar use of credit/working capital, and have similar collateral requirements. A third of the women (twice as many as men) are using personal loans to finance their business. Like other industries where women capitalized with debt, a very large loss of company control seems likely to have occurred. Women are producing lower sales and their firms are not growing. The proportion of labor to sales suggests that whatever they are producing is more labor intensive. It seems likely that the difference in performance between women and men in manufacturing is rooted in the nature of the product they are making. The fact that so much government corruption appeared aimed at the men in this sector unlike the women and unlike the men in any other sector also suggests that the male-owned firms are producing goods for a very different category than are the women-owned ones. Women may be more likely to make goods that are susceptible to tastes and fashions, such as housewares or apparel, and perhaps are handmade. Such goods often also need constant updating in terms of both the skills and the materials to make them. This may be the explanation for the belief that the statement that women “possess other characteristics” gets such a positive response. 22 Moldavija INDD Final.indd 22 16-Mar-18 10:22:45 AM The wider use by women of online platforms to sell and of websites, as well as the larger geographic scope of their customer base, might also support that conclusion. It is comparatively easy to sell small craft objects directly to consumers over the web. There is a suggestion here, however, that technical assistance moving these women manufacturer toward more scalable production methods would be helpful. More than 70 percent of the women said they felt female entrepreneurs possessed different characteristics than men (as compared to about half the men answering this way), by far the segment in the sample who most often answered that question positively . Like other groups in the sample, there was very strong agreement among women and men that official and community attitudes toward female entrepreneurs are the biggest barrier, but support for government programs was strong (and awareness low). 3. Retail Trade Retail trade is the largest sector for women-owned firms and the second largest for men-owned ones. However, retail sales among women- owned firms are below the average for men-owned firms, as well as less than the average for female-owned businesses as a whole. Sales have declined for both sexes in the past two years, but the women’s sales are down quite a lot more than the men’s. Employment levels and practices are about the same for men- and women-owned firms. In retail, women appear to be managing their businesses more conservatively than the men. Both sexes started their businesses mostly for income, but the women in retail are survival-oriented, while the men are much more likely to be interested in growth. Yet fewer women needed funds to start and more of them own their buildings and land. Indeed, at 81 percent ownership of land, the women in retail are more than twice as likely to own land than the men, and they are also quite a lot more likely to own land than the male owners in any industry. Thus, these women should have had a good financial base for growth. However, they are far less likely to be purchasing fixed assets, and, when they did buy, paid for them entirely from internal funds. Women in retail are also significantly less likely to innovate than the men and quite a lot less likely to be importing the goods they sell. The apparent conservatism may be due in part to demographics: these are the youngest women in the sample, they are less educated, and they had children at a very young age. They depend almost exclusively on institutional childcare (while the men rely more on the other parent). Time poverty is likely an issue and they may be protective of their capital because of their children. They may feel it is all they can do to earn a living and keep their heads above water. Only a third of the female respondents were owners, as compared to 96 percent of the males. Furthermore, male owners said they owned 100 percent of the shares while female owner-respondents controlled about 80 percent. And, 100 percent of the male respondents were top managers, while only 47 percent of the females responding were. Less than half of the women are the top managers of their firm,( with men reporting that they both own and lead their businesses). There is some indication of unequal treatment by banks and government officials. Though women and men are equally likely to have lines of credit, fewer women applied for credit in the past year and those who did were required to pledge four times the amount of collateral as the men. A large percentage (83 percent) of female retailers were visited by tax officials, more than any other women- or men-owned group. All women (100 percent) were subject to other official visits, again the largest among all female or male groups, and 8.4 percent% of them were asked for a gift or informal payment by a tax inspector (n=92), while another 7.4 percent had to gift/pay another inspector. None of the men had this experience.. Attitudes Toward Business/Government Environment for Female Entrepreneurs in Retail Figure 2.15: Attitudes Toward Business/Government Female forand (% agreeing, male Entrepreneurs in Retail female) Female entrepreneurs need special government attention 99 58 More positive offical attitudes needed toward female entrepreneurs 100 93 Government support programs would help female entrepreneurs 69 86 Aware of government programs to support female entrepreneurs 12 14 Unfavorable attitude toward business environment 36 58 Male Female Supporting Women’s Entrepreneurship in Moldova 23 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 23 16-Mar-18 10:22:45 AM All the men thought women needed more government attention and that negative, traditional attitudes among both officials and communities were the top barrier for female entrepreneurship in Moldova (Figure 2.15). It is worrisome that the men in retail may be reporting, via this survey, that they observe unequal treatment happening in their industry. Women seem less likely to feel they need attention, but were keenly interested in support programs. Yet very few were aware of the existence of such programs. 4. Wholesale Trade Wholesale trade is a small industry in Moldova, representing only about 4 percent of all enterprise in the country, but it is an industry where women are particularly strong. Wholesale represents about 18 percent of all women- owned enterprises, the third largest industry among women, and females control 89 percent of all the firms in this industry, outnumbering men 7 to 1. In addition, average annual sales for women-owned wholesale businesses (Figure 2.16) are strong at nearly 6 million Moldovan Leu (MDL). This figure is 65 percent more than the mean for women-owned businesses and 88 percent more than the mean for men-owned ones. Women-owned wholesalers also outperformed the mean for women-owned business on growth, although they grew less than male wholesalers. (It is important to remember that there is one very large outlier in the male-owned wholesale businesses, who brings the average sales to 200 million and the number of employees to 104 . This make sales and employee comparisons between men and women in this industry difficult.) The female wholesalers also have very good labor productivity, which, at 382, is one of the highest by industry or gender. Figure 2.16: Performance of Female Performance Wholesalers of Female as Compared Wholesalers to Total as Comparedto Female Total Female Sample Sample Female Wholesalers All Female - Owned Businesses Annual sales (MDLS 2016) 5,985,489 3,618,719 Sales growth, 2014 to 2016 111 100 Labor productivity 382 172 Despite this strong performance, the women in wholesale are not currently developing their businesses with the same enthusiasm as the men. Three- quarters of the men list their top goal as growth, while about the same proportion of women say they are just trying to survive. This different attitude toward growth is reflected in the business activities of women, as compared to men. Men are far more likely than women to be members of an industry group, and they exploit their memberships for business purposes to a high degree, while female memberships in similar groups are largely not used for business development. None of the women have innovated in recent years, while virtually all the men have introduced a new product or service or altered an existing one. Of men, 79 percent have their own websites, while 63 percent of women do not have websites. Men are twice as likely to use online platforms to reach suppliers and are also quite a bit more likely to use them to reach customers. About half of men seek out professional and l/business training, while 77 percent of women did not seek professional training. Women, however, are far more engaged in international markets: nearly 90 percent of women are importing their products from abroad. Women also tend to sell at the national level, while men focus more locally. An explanation for the lack of engagement on the part of women may be that an unusually large percentage of them (about a third) acquired their firm through inheritance, while men either founded or purchased theirs. This origin is discernible in the funding at acquisition: nearly 90 percent of the men needed funding, but only two-thirds of the women did. Further, the men’s acquisition was funded through their own savings (85 percent), while women drew half from their own funds and the rest from family. About twice as many men bought fixed assets during the year and all them paid for the assets out of internal funds, while all the women who bought such assets borrowed the money from family. Women in wholesale also were more likely than any other group to say that their motivation for starting the business was family tradition. The gender polarity visible in other industries seems to also be present in wholesale, although to a lesser degree. Women appear to have ceded ownership and leadership to some degree, whereas men have not done so at all. There are female owners and managers in female- owned businesses, but much less so in male-owned businesses. Nevertheless, female wholesalers seem to be holding onto ownership better than females in other industries and that may be because they did not have to use debt to start up. 24 Moldavija INDD Final.indd 24 16-Mar-18 10:22:45 AM In wholesaling, both genders have a negative attitude toward government. Women, however, seem to have a concrete reason. Although 36 percent of women and 41 percent of men were visited an average of two and three times by tax officials, fully two-thirds of the women were asked for gifts or payments by tax officials in a single year, but none of the men had this experience. Not surprisingly, more than half of female wholesalers said their biggest problem was with customs, but no men mentioned customs and trade regulations as barriers or as causing problems. Women engage more with customs because they import more often—but it may also be that the same demands made by tax and inspection officials toward women are also problems in the customs area. All (100 percent) of both men and women said that the most helpful thing that could be done to support female entrepreneurs is to improve officials’ attitudes toward them. A very large number of men (80 percent) said that legal regulations should be improved for women (compared to only 36 percent among all men in the study). This response may indicate that men are aware of the discriminatory government problems that women appear to be having in the industry. 5. Construction The construction industry shows the most inequality between men and women inof all the sectors reported, and also a high degree of polarization. However, despite a very uneven playing field, especially in financing, women are performing as well or better than men. They produced twice the average annual sales in 2016 and maintained that level from 2014 on, while males’ sales by men declined 14 percent during this same period . Men are a much larger part of the construction industry than women are, with an estimated 3,251 firms, representing about 20 percent of all male-owned firms. Women have only 211 firms in the construction industry, representing only 6 percent of all female-owned firms. Women-owned construction firms, however, employ twice the number of people that men do. Ownership and leadership statistics for the two genders are quite different in the construction industry, and the pattern is more negative than in other industries. Of the respondents to the survey, only 8 percent of females were owners (the lowest of any industry), while 96 percent of the men were. This represents only an estimated 10 women versus 3,200 men. Of these owners, the women own 46 percent of their companies while the men own 99 percent. Both men and women owners in these cases, however, are the top managers in their firms. And, the percentage of women-owned firms that is held by female owners is roughly the same as the sample. The female owners all founded their own firm; 77 percent of males founded the firm, but 23 percent purchased it. Importantly, about three-quarters of the women required funds for the acquisition and /startup, but only half of men did. Both groups were able to get most funding from savings or family and friends. Currently, these women seem to be managing assets quite conservatively. They own all their buildings and land, while men own much less of both. More than three quarters of men purchased fixed assets in the last year, while only 6 percent of women did. Of those who applied for a loan in the past year, 65 percent of women had to pledge collateral and pledged 80 percent of the loan, whereas none of the men did. Women were about twice as likely to express concerns about interest rates as a reason to avoid taking out debt. Today, about half the men report that they are part of a larger firm, which probably indicates they received further sources of capital and perhaps equity—but no women answered this question affirmatively. Considering their minority position in the industry, it is perhaps not surprising that the women are motivated more often by the threat of competition (91 percent), while men do not consider competition at all (0.6 percent). Men were more growth-oriented while women were twice as likely as men to just be oriented toward their businesses surviving. Similarly, the rate of innovation may reflect the relative pressure of survival: virtually no women made any changes in the last year, while 74 percent of the men introduced at least one new product or service. Despite the very clear differences in the circumstances women operate under in the construction industry, neither men nor women thought they had special characteristics. Virtually all said that females did not need special attention from government. None knew of government programs to help. When asked, the men and the women both chose the same top two ways to stimulate female entrepreneurship: better official attitudes and less traditional cultural attitudes. In this way, attitudes in the construction industry isare similar to those of industries in the rest of the sample. Supporting Women’s Entrepreneurship in Moldova 25 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 25 16-Mar-18 10:22:45 AM 6. Hotels and Restaurants The difference between the genders in the hospitality industry is the greatest of all the industry profiles and it begins with the circumstances of ownership. Nearly all females (99 percent) acquired their business during the course of privatization and they did so an average of 17 years ago. Unlike the females in the other industries, virtually all of the female respondents are owners and they own all of their company. In contrast, 100 percent of male owners in the hotel/restaurant industry acquired their firms an average of only three years ago, by founding it themselves. While all of the men needed funds to acquire and start up their business, virtually none of the women did. Women produced close to ten times the average annual sales that men did in 2016. Women also employ five times more people than men do. Between 2014 and 2016, however, both male- and female-owned businesses were down about 11-12 percent. The women, on the other hand, are better connected and much more likely to belong to trade groups and use them to build businesses. All the women have their own websites and none of the men do. All the women use online platforms to contact customers and suppliers, but none of the men do either of these. The men, however, are more innovative in their product offerings: all introduced new products/services or modified existing ones within the past year, while only half the women did. The women own 100 percent of their buildings and 99 percent of their land. The men rent 100 percent of their buildings, as well as 100 percent of their land. Both provide all of their working capital from internal funds, and only two of the women purchased fixed assets, which were financed 100 percent from internal funds. Neither of them used remittances for any of these transactions. None of either group has a line of credit. These are older people, the women are 48 and the men are 56. All of the women are college educated, but none of the men are (100 percent went only to high school). All of the men and women are married, and all have children. The average age of their youngest child is rather advanced, 28 for men and 20 for women. These business owners overwhelmingly judge the environment to be unfavorable, both men and women. Their biggest obstacles are corruption for the men (100 percent) and either access to finance (49 percent) or “inadequately educated workforce” (49 percent) for the women. None of either gender think women need special attention from the government. Half the women and none of the men know about the availability of special programs. Men and women (100 percent in both groups say that the first thing to do in support of female entrepreneurs is to improve the attitudes of officials. Interestingly, 99 percent of the women say the next best thing is to foster traditional attitudes, but none of the men agree. Instead, they suggest support programs. 7. Services In the service industry, both men and women port low sales (about 1.6 million MDL), compared to other sectors. On an average basis (as compared to medians), women’s sales grew 13 percent, as compared to men’s, which declined 32 percent, between 2014 and 2016. Women employ slightly more people. Women are more actively cultivating their businesses than men and are much more likely to innovate, as well as to have a website. Importantly, they are about ten times more likely to use online platforms to find suppliers and customers. Women in services have a very different demographic profile from any other group in the sample. All are college educated, but nearly 40 percent are single or divorced. About two-thirds have children, and they are young. They rely on institutions to care for them. Men in services resemble the sample. For the females, loss of ownership may be fairly high: only 22 percent of the female respondents were owners as compared to 92 percent of the men. Females who were owners held 61 percent of shares versus 75 percent for males. All women and men owner-respondents, however, were the top managers at their firms (96 percent and 100 percent respectively). Approximately 70 percent of shares of the female- owned businesses are owned by women and 80 percent of the top slots are held by women. 26 Moldavija INDD Final.indd 26 16-Mar-18 10:22:45 AM Different motivations were behind decisions to start a business. Females were more likely to point to self-realization or current job dissatisfaction (54 percent), while males were looking for income and a business opportunity. Only 55 percent of the women required funds to start up, compared to 82 percent of men. Nevertheless, both men and women started with at least 30 percent of the capital coming from bank loans. Women were extremely dissatisfied with the business environment, with 77 percent rating it unfavorable, compared to only 7 percent of the men (who were mostly neutral). However, neither men nor women particularly thought that government needed to pay special attention to female entrepreneurs and most were unaware of government programs. Both, however, listed support programs as one of the top two ways to help foster entrepreneurship among females, and both also pointed to traditional attitudes as a problem. D. Regional Analysis There are strong differences among the different regions of Moldova in terms of the circumstances of women-owned businesses. The demographics vary widely between men and women business owners among the regions, as does their length of time in business, source of capitalization, and success in the marketplace. Without question, however, the priority for intervention should be in the South, where the women seemed to be in real distress. The region with the most potential is probably Chisinau. Corruption seems to be focused in the North and in Chisinau, though this may be a function of industry concentration. 1. South Female entrepreneurs are experiencing the most difficulty in the southern region than in any other. They appear to have lost more ownership than women have in any other region, based on the number of owners among respondents. They have become burdened with a bad credit record, have become focused on mere survival, and have given up innovating. They have the lowest annual sales of any region, and these sales are less than the sample average for women. These women have an extremely negative assessment of the business environment (93 percent unfavorable) and are universally of the opinion that they need help from the government (96 percent). Males by contrast have maintained all ownership and 97 percent of them are top managers. They are able to easily use of debt, are overwhelmingly growth-oriented, and are innovative. They are generating twice the sales as the women, and their sales numbers are among the highest of the men in any category. They are also the oldest and perhaps richest men in the whole sample, and 74 percent of them view the business environment as good or neutral. The disparity may originate in the original capitalization: virtually none of the women had personal savings to invest, so 91 percent of women took out a bank loan to fund start-up. With males, however, 87 percent funded their businesses from their own savings. Thus, from the beginning, the women had a heavier debt burden and Higher interest costs, compared to men, while males had equity that could be leveraged as needed and the women did not. It appears that the early bank loans at startup have further left the women with a bad credit record, while the men have been able to build up their businesses to the point where they can easily tap credit to leverage their activities. Today, the women are much less likely than the men to have credit lines, sowhile the men use bank loans for both working capital and asset purchases, but the women do not. Only 25 percent of the women even applied for a loan this year, as opposed to 80 percent% of the men. Though both had to pledge collateral for recent loans, the women had to pledge 207 percent of the value, while men only had to pledge 24 percent. Importantly, in the South, the male view of the women’s predicament also showed concern, with 97 percent of the men saying the government should help the women. Supporting Women’s Entrepreneurship in Moldova 27 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 27 16-Mar-18 10:22:45 AM 2. North Women business owners in the North seem likely to have retained a high degree of ownership and control compared to women elsewhere, but are still well behind the men in their region, who have retained virtually all ownership and control. In this region, in contrast to the South, the women are the oldest of all the female categories in the sample, at an average age of 59. The men, however, are among the youngest. Thus, it makes sense that most of the acquisition by privatization occurred the South, with 18 percent of the women, on average in 1999, having assumed ownership that way. The men, obviously, came much later and are more likely to have founded their own firms. As one might expect from the influence of privatization, the women were less likely than the men to have needed funds at startup. These women were also able to get other funding from family and friends. Thus, the women in the North did not have the struggle with startup debt that females in other areas did. Further, these women have retained ownership of both land and buildings, while very few of the men own these assets. The women are using more bank credit, but it appears to be happening because their cash flow is tight, rather than just because they can do it easily. They are less able to fund with internal money and they are having to pledge much more collateral (179 versus 150 ). However, it is also possible that they are just experiencing bad treatment from the banks. Both men and women expressed a high level of concern about interest rates and they listed that as a reason not to apply for loans ahead of “no need” as in other categories. The women are producing about twice the level of sales as the men, but their sales have declined since 2014, while sales for the men grew during this period. Both groups are almost entirely concentrating on the purpose of mere survival (78 percent of the women and 83 percent of the men), as opposed to growth, and neither is innovating. Women have an extremely negative view of the business environment, while the men are more optimistic than other men (perhaps because they are young). Importantly, both sexes thought government should pay special attention to female entrepreneurs, at very high levels for each (85 percent of the women, and 88 percent of the men). However, most of the men and women were not aware of existing programs (4 percent versus 3 percent). 3. Center The females in this region are very young and have very young children. The men are much older and have grown children. Some of the difference in the demographics may be attributable to the high percentage of firms inherited by females (33 percent, one of the highest in any category only wholesale among the industries is this high). The women are motivated very differently, too. These women give “lack of employment” as a reason for startup (38 percent) at a higher rate than any other category of the sample. The women need funds when they started, but were able to start with a large amount of savings and family funds (51 percent and 34 percent, respectively) while the men got the lion’s share of their funding from a bank (78 percent). Despite an auspicious start, at least from a financial perspective, the respondent owners who are female now own only 59 percent of shares compared to 93 percent of males. Nevertheless, 80 percent of the women are the top managers, a high number for women in all categories, while nearly all the men are. Females generally own about 77 percent (about average for the sample) of the total shares in women- owned businesses, while it appears that male-owned businesses have few shares owned by women, given that so many male respondents owned nearly all their shares. Even with all these disadvantages, women in this region produced about the same level of annual sales as the men and their sales were growing, while the male-owned businesses were declining (111 versus 86 ). This occurred even though the men are considerably more oriented toward growth (87 percent of the men, and 38 percent of the women) whereas the women are more oriented to survival. The women are not innovative, while the men are (77 percent of the men versus 12 percent of the women did not innovate in the past year). Women-owned businesses are especially low on labor productivity (34 female, 94 men). Currently, women use internal funds for working capital less often than men (56 percent vs.versus 82 percent) and rely much more heavily on banks and customer/suppliers. About three times as many men as women bought fixed assets during the year (74 percent versus 27 percent), but for both men and women, most assets were financed with internal funds. They are equally likely to have a line of credit, all were asked for collateral on recent loans, but women pledged about 60 percent% more than men in value (159 versus 101 ). In this region, it does seem likely there is unfair treatment by the banks. 28 Moldavija INDD Final.indd 28 16-Mar-18 10:22:45 AM Importantly, the government corruption discussed in the industry section also appears to occur in the central region,. where 80 percent of women were visited in the past year by tax officials and 18 percent were asked for a gift or payment. Only 18 percent of men were visited and none were asked for gifts or payments. Other inspections were made to 92 percent of women and 89 percent of men, but 15 percent of women were asked for gifts or payments and no men were. 4. Chisinau Women business owners in Chisinau are different from the women in the rest of the country. They are about the same age as the sample and the men in Chisinau. However, they are much less likely to be married (75 percent) and significantly fewer have children (52 percent), the lowest number for any category. Females also had a wider spread of reasons for starting a business than in other districts or than the men. In Chisinau, the largest number gave income as a reason (42 percent), but that answer was given less frequently than it was by any other category of respondent. Instead, these female entrepreneurs said that dissatisfaction with their job and a desire to self-realize were their reasons (a total of 33 percent), with business opportunity and family tradition following as reasons. These young women may be rapidly losing control of their firms. Female owner-respondents were equally likely to have founded their firms as males (84 percent versus 90 percent), but now only have 68 percent of shares. While men have considerably more shares than women (86 percent), they own less than in other regions or sectors. However, 100 percent of the males are the top managers in their business, but only 57 percent of the women are the lowest of any region. Consistent with the sample, women own 75 percent of all shares in women-owned businesses. Approximately 60 percent% of men and women required funds and used personal savings as startup. Women, however, were more likely to have supplemented with bank loans (14 percent versus 0), with the rest of funds for each coming from family and friends. Women- owned firms in Chisinau employ more women than men (50 percent versus 25 percent), including as managers (59 percent to 31 percent). Women are producing slightly higher annual sales than men and they are growing faster (110 versus 100 ). Women also have higher labor productivity. However, they do not innovate as often. This may be linked to the lower incidence of fixed- asset purchases for women versus men in the past year. Less than a third of the women have a line of credit, and even fewer of the men have one. Interestingly, the women are less often than men asked for collateral (86 percent versus 98 percent) and are also less often required to pledge less of it (69 percent versus 100 percent). A high percentage of both sexes report importing their materials (58 percent women, 55 percent men). A comparatively large percentage of both also report competing with unregistered firms (34 percent women, 27 percent men). Chisinau is the other region where corruption appears concentrated. Women were visited by tax inspectors twice as often as men, although about the same percentage were visited at least once. However, 16 percent of the women were reported being asked for bribes, while none of the men were. In other inspections, men and women were visited with equal frequency, but 8 percent of the women were asked for bribes and, again, none of the men were. Nevertheless, 64 percent of the women think female entrepreneurs need special government attention (versus only 26 percent of the men). 5. Construction TThe construction industry shows the most inequality of all the sectors reported, as well as a high degree of polarization. However, despite a very uneven playing field, especially in financing, women are performing as well or better than men. They produced twice the average annual sales in 2016 and maintained that level from 2014, while sales for men declined 14 percent. Men are a much larger part of the construction industry than women are, with an estimated 3,251 firms (representing about 20 percent of all male-owned firms). Women have only 211 construction firms, and only 6 of these are all female-owned firms. Women-owned construction firms, however, employ twice the number of people that men do. Ownership and leadership statistics for the two genders are quite different in the construction industry, and the pattern is more negative than in other industries. Of the respondents to the survey, only 8 percent of females were owners (the lowest of any industry), while 96 percent of the men were. This represents only an estimated 10 women versus 3,200 men. Of these owners, the women own 46 percent of their companies while the men own 99 percent. Both, however, are the top managers in their firms. And, the percentage of women-owned Supporting Women’s Entrepreneurship in Moldova 29 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 29 16-Mar-18 10:22:45 AM firms that is held by female owners is roughly the same as the sample. The female owners all founded their own firm; 77 percent of males founded the firm, but 23 percent purchased it. Importantly, about three-quarters of the women required funds for the acquisition and /startup, but only half of men did. Both were able to get most funding from savings or family and friends. Currently, these women seem to be managing assets quite conservatively. They own all their buildings and land, while men own much less of both. More than three quarters of men purchased fixed assets in the last year, while only 6 percent of women did. Of those who applied for a loan in the past year, 65 percent of women had to pledge collateral and none of the men did; women pledged 80 percent of the value of the loan. Women were about twice as likely to express concerns about interest rates as a reason to avoid taking out debt. Today, about half the men report that they are part of a larger firm, which probably indicates further sources of capital and perhaps equity—but no women answered this question affirmatively. Considering their minority position in the industry, it is perhaps not surprising that the women are motivated more often by the threat of competition (91 percent), while men do not worry about competition at all (0.6 percent). Men were more growth-oriented and women were twice as likely as men to be oriented toward survival. Similarly, the rate of innovation may reflect the relative pressure of survival: virtually no women made any changes in the last year, while 74 percent of the men introduced at least one new product or service. Despite the very clear differences in the circumstances women operate under in construction, neither men nor women thought that women had special characteristics. Virtually all respondents said that females did not need special attention from the government. None knew of government programs to help. When asked, the men and the women both chose the same top two ways to stimulate female entrepreneurship: better official attitudes and less traditional cultural attitudes. In this way, attitudes in construction isare similar to those in the rest of the sample. 30 Moldavija INDD Final.indd 30 16-Mar-18 10:22:47 AM CHAPTER 3 - ORGANIZATION FOR SME SECTOR DEVELOPMENT (ODIMM) A. Overview The Organization for Small and Medium Enterprises (SME) Sector Development (ODIMM) was established in 2007 to implement the policies of the Republic of Moldova in support of small and medium enterprises. It is a public institution that coordinates with the Ministry of the Economy and also collaborates with other ministries, as well as with local public authorities. ODIMM manages funding provided by the state, as well as from international assistance programs. They also apply for outside grants, as well as for international partnerships and programs related to SMEs. Their budget draws on these financial means, in accordance with the legislation that established their organization (Government Decision no. 538. 17 May 2017). ODIMM’s budget has been increasing since its founding, largely due to successful application for international funds. Today, the ODIMM budget consists of: 100,000 million MDL from the state and 100 million MDL for a loan guarantee fund (discussed below). The main outside donors are the World Bank and the European Union (EU). ODIMM has also received funding from the Organisation for Economic Co-operation and Development (OECD), as well as the governments of Norway, Japan, and the Netherlands. The funds and their uses are audited by the Court of Auditors, the financial inspection office of the Ministry of Finance, and other relevant bodies. All government programs must be approved by the national government. To date, ODIMM has administered programs that have benefited 100,000 existing and aspiring Moldovan business owners as follows: 54, 000 - business consultations; 24,000 - entrepreneurial trainings; 2,800 - grants, subsidies, and financial guarantees; and more than 300 business incubators and other projects. ODIMM administers programs for both male and female entrepreneurs, some of which are delivering good target numbers for women. Currently, these programs have a beneficiary mix of at least 30 percent women, which is commensurate with the existing representation of female entrepreneurship in the overall economy (27.8 percent, according to ODIMM). All ODIMM programs are monitored and evaluated for gender reach. Beginning in 2015, the Ministry of Economy introduced “Priority VII: Developing Women’s Entrepreneurship in the Republic of Moldova,” as part of the SME Sector Development Strategy 2012-2020, as well as an associated action plan for implementation in 2015-2017. At that time, ODIMM added a targeted strategy, to encourage women to start and grow businesses. Their ambition is to raise the percentage of female entrepreneurs to 40-50 percent; therefore, program targets should be gradually increasing to achieve this end. In this chapter, the programs available to both women and men, but which also target and measure female participation, will be detailed first. Then, a description of programs aimed exclusively at women will be described. A few other observations about ODIMM’s strengths, needs, and future will be offered. All this information was used to formulate the recommendations given in the Strategic Recommendations chapter. Supporting Women’s Entrepreneurship in Moldova 31 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 31 16-Mar-18 10:22:47 AM B. “Gender Neutral” Programs Available to Women 1. Loan Guarantee Fund In 2007, ODIMM took over the administration of a state loan guarantee fund that was first established in 2003. The intention of the loan guarantee fund is to encourage credit availability for SMEs through commercial banks. The strategy is to reduce risk to banks by providing guarantees and to provide additional support for entrepreneurs who have viable businesses but too little collateral to offer for security. At present, the loan guarantee fund totals 100 million MDL. ODIMM can loan up to three times the value of the fund, which increases the total available to 300 million MDL. Since 2013, the World Bank has supported ODIMM in order to improve the guarantee, guarantee products, and has provided monitoring and evaluation systems of the fund. When ODIMM began managing the fund, there were inefficiency problems that led to higher costs and made the program unattractive to banks. As a result, ODIMM streamlined theits procedures, successfully reducing fees from 2 percent to 0.5 percent and increasing the ceiling from 700,000 MDL to 5 million MDL. They also produced a manual for banks to use and made presentations to local banks to inform and persuade on behalf of the revised program. The banking crisis required a short temporary suspension of program implementation. At this point, however, all but one commercial bank has signed an agreement with ODIMM to participate in the program. (The remaining bank is a new one, so there is a delay in sign-up.) They are also negotiating with the two largest microfinance institutions, Prime Capital and Total Leasing. Since the beginning of 2016, they have been receiving four requests a week for guarantees. To date, the procedure has been for banks to assess loan applications and then turn to ODIMM for approval for the guarantee. ODIMM has released funds on a case-by-case basis. Under this procedure, ODIMM has sustained a record of disbursing 30 percent of the loan guarantee funds to women. The World Bank also helped ODIMM to develop a new program: portfolio guarantees. However, the new procedure may pose a risk to credit availability for women-owned SMEs. After signing the contracts for this program, banks will manage a portfolio of loans for which ODIMM will set quotas and eligibility criteria by industry sector. The banks themselves will make loan decisions and will also approve guarantee funds. Both the Enterprise Gender Survey data and informal interviews suggested that Moldovan banks are treating women customers unequally, which should cause concern about the future availability and cost of funds for women under this new system. At the moment, the banks say they are not able to report to ODIMM the percentage of women in their current loan portfolio. Unless steps are taken to ensure that the target for women is reported and maintained, along with reports of the terms being offered women versus men, there is a risk of credit under this program becoming unavailable to or prohibitively expensive for female entrepreneurs. Under the proposed arrangement, a budget will be given to each bank, with parameters set by industry, and the banks will make their own decisions. ODIMM is currently working on software that will allow them to work directly with banks online. It is essential that this software be designed in a way that allows real-time monitoring of the gender balance of the portfolio, as well as comparative data on loan terms. ODIMM now plans to negotiate with the National Moldova Bank to recognize their guarantee as collateral, so that ODIMM can be classified as a secured source. Without this arrangement, the funds are seen as high risk, because they are not guaranteed by land. The banks, as a consequence, have to increase their reserves when they lend under this program. Recognition of the ODIMM funds as secure is likely to benefit women entrepreneurs since they are probably overall less likely to be able to provide land as security. 32 Moldavija INDD Final.indd 32 16-Mar-18 10:22:47 AM 2. Incubators ODIMM, with the support of local and central public authorities, as well as financial support from the European Union and the government of Norway, has built eleven incubators around the country, of which nine are active. About 34 percent of current occupants are female. There are a total of 162 resident companies, of which 35 percent were established by women. They have created 821 jobs, of which 73 percent went to women. Overall, there are 157 graduates of the business incubators. The incubator system comes under the Moldovan Network of Business Incubators (RIAM) and is a member of the Black Sea Business Incubators Network (more than 50 members from Moldova, Turkey, Romania, Ukraine, Armenia, and Greece). These incubators provide space and utilities, as well as consultancy services, for both women and men. Conference space, WiFi Internet service, and parking are also provided. Rents paid by entrepreneurs are at below-market rates, as are charges for utilities. ODIMM is currently subsidizing the utilities. The incubators have been set up with seed funding, but are expected to shift within a few years to full funding coming from rents paid by entrepreneurs. As women-owned businesses grow more slowly, a longer underwriting period might attract more female entrepreneurs, as well as incentivize managers to recruit them. Officials at the site visited had considered a childcare facility and appeared to have ample room, but the steep stairs in the building were considered a safety hazard, so the management did not go forward with the idea. However, in a more appropriate facility, this idea could be tested and, if it proved attractive and feasible, expanded to other incubators. Providing childcare on site would be even more likely to draw women in. As discussed elsewhere in this report, the burden of early childhood care (0-3 years) is a significant deterrent to entrepreneurial activity among young adult women. This particular incubator needed more staff. They have only two consultants and they need to be able to provide more specialized advice. ODIMM is already available to them for general business and agricultural advice. They would like to have the capability to also provide advice on accounting and marketing. Online access would work. The occupants of this incubator are paying 30 to 40 percent of market for rent, while the incubator itself is paying the market rate. This arrangement will need continued subsidies. Right now, they have more applicants than space. This is in part due to the activities and encouragement at the District . Incubator managers say that the biggest challenge for local entrepreneurs is that there is no local consumer market. The budding manufacturers need to export, but customs processes present a barrier. Logistics and excessive paperwork were specifically mentioned. None of the occupants appeared to be producing at a high volume and most were selling through Facebook. This indicates small- scale activity, but probably international reach. Customs charges may be falling disproportionately on these manufacturers. Streamlined procedures and lighter charges might help these manufacturers to grow. A couple of the women did seem to have found an outside market that could be developed. However, all of the women were still manufacturing by hand. So, they also need advice on scaling, either by outsourcing or, more likely, shifting manufacture to machines. 3. National Program for Economic Empowerment of Youth The National Program for Economic Empowerment of YouthThis is a training program with special concentration on youth. The Pprogram has two main components: (1) training focused on general business, human relations, and financial training, and (2) a financing component in which 40 percent of the loan becomes a grant once the first 60 percent is paid off. There are three steps for participants in this program: Stage 1. Entrepreneurial consultancy. More than 12,700 young people consulted, of which 45percent were female. Stage 2. Business training (10 days). 4,103 trained, 43percent women. Stage 3. Business financing. 1,647 projects financed, 30percent women. In all the ODIMM programs, women are signing up at least equally, except for financial training. An initiative should be undertaken to understand this tendency for women to undersubscribe to financial course offerings and then to use that learning to improve their participation. Supporting Women’s Entrepreneurship in Moldova 33 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 33 16-Mar-18 10:22:47 AM 4. Life-long Learning: Efficient Business Management A life-long learning program in efficient business management, was launched in 2009, in which ODIMM teaches business management, especially improving efficiency. The program is supported by the Moldovan state and it includes consultations and training, both of which are offered free. The consulting service has reached 16,000. The training, which has expanded from an initial offering of five modules to twelve modules, includes business strategy, financial management, online marketing, procedures for participating in European projects, time management, sales and merchandizing, accounting, labor law and human relations, registration, procurement, and various regulations and procedures, both national and international. The training thematics are continuously updated depending on the requirements of the entrepreneurs and the market. The courses have reached 13,171 entrepreneurs, of which 66 percent are women. 5. PARE 1+1 The PARE 1+1 program focuses on returning migrants. It offers the following: • Informational support—over 13,000 persons consulted • Entrepreneurial trainings and consultations—1,310 migrants and first degree relatives trained, 35percent women. • Financing according to a 1+1 rule—more than 1,000 financing agreements, with 31percent women. • Post financing support—more than 800 businesses assisted and monitored; more than 3,000 work places created. Loans of 1,000 MDL are made available, of which about 30 percent% are going to women. There is also a guarantee fund 300 MDL, of which 30 percent goes to women. C. Women-focused Programs ODIMM spent its first three years targeting women in outreach efforts that allowed them to gain a deep understanding of the economic situation of women in Moldova, especially as regards to business start-up and ownership. They also appear to have built an extensive network that can be used effectively for outreach, organizing, and information collection. When asked about the special challenges facing women entrepreneurs in Moldova, the gender team at ODIMM listed the following: • Lack of knowledge and skills • Lack of success stories to act as examples • Lack of self-confidence The team attributed the lack of self-confidence to traditional Moldovan attitudes and practices that restrict women to the home, as well as undervalue their capabilities and contributions. The women the ODIMM team meets cannot imagine themselves as businesswomen, nor do they know of others like themselves who have done such a thing as start a successful business. ODIMM has also observed that the women worry more than men about being the victims of corruption . Because of the general “can’t do” attitude, especially among rural women, ODIMM found they had to have at least three meetings with them in order to even get them thinking seriously about entrepreneurship and to understand what ODIMM could do for them. They also have found it necessary to go to the women to hold meetings, rather than ask the women to come to ODIMM. ODIMM officials also must pay close attention to the times and circumstances for the outreach efforts in order to make it as easy as possible for the women to attend. (The need to go to the women and to facilitate attendance is consistent with world experience. Despite this general lack of confidence, the women have shown great eagerness to learn from ODIMM and to try starting a business. Therefore, the initial outreach served the purpose of allowing ODIMM to learn about women entrepreneurs, as well as to pique the interest of the women. These things suggest strong potential. In addition to these general observations, ODIMM offered the following judgments of business-related knowledge/skill deficits: • Women need to be taught the importance of information technology • Women need to be taught the importance of quality certification processes, as well as how to execute them • Women need to be taught to find a market niche of their own and not just copy others. Importantly, throughout their experiences, ODIMM has observed that their entry point must include—or even focus on—unregistered businesses. For this reason, their “target audience” would be slightly different from the women in the sample of the Enterprise Gender survey. 34 Moldavija INDD Final.indd 34 16-Mar-18 10:22:47 AM 1. Women in Business Program This program was begun recently by ODIMM. The pilot period will be three years beginning from the end of calendar year 2016. The program’s purpose is to provide financial and non-financial support by providing grants and services relevant to businesses managed by women, especially by expanding markets, engaging in export, and increasing innovation. The Women in Business program focuses on women living in rural areas that have high female unemployment. The target is to train 300 women. The program budget is 52 million MDL. The program was divided into segments according to business stages: (1) women who planned to start a business within the next twelve months; (2) women-owned enterprises that were registered less than two years prior to application;, and (3) companies that had been active more than two years, were created and managed by women, and planned to increase turnover and jobs in the next 18 months. Support was organized as follows: • Business launches: providing training and guidance in planning. • Start-ups: providing small-scale investment, and providing business development support in order to reduce risk of failure • Growing companies: providing larger investment through advisory services for maximizing impact. The first stage focuses on women who are unregistered as businesses, for whom ODIMM will provide business training, and individual consulting and mentoring services. The second stage, for which the target is 100 enterprises created and managed by women, will be given grants for business development: 5,000 Euros as an investment, as well as 2,500 Euros to use for certifications, especially for exporting, that are needed to conduct business. In the third3rd stage, five women will be chosen who have been in business at least five years, as well as ten women who have been in business at least two years, to whom ODIMM will give a 70,000 Euro grant for investment and another 5,000 Euro for the certifications. Thus far, ODIMM has achieved the following results: • Almost 600 women who wanted to create a business were registered; • 250 women were trained and given individual consulting and mentoring services; • A first call for proposals was launched for the start-up created and managed by women (grant contest); • Various events were organized. 2. Women’s National Platform On its own initiative, in 2012, ODIMM founded the Women’s National Platform, dedicated to entrepreneurship. The main objective was to increase awareness among women about the potential to acquire and develop skills through entrepreneurship, and in the process, create positive changes in their own lives and in their communities. The ongoing activities of the Platform program include professional development training, master classes on business-related subjects, promotion in the media of success stories, networking sessions, and promotion of women-owned businesses. The program also aims to promote public/private dialogue, especially through a series of roundtables with female entrepreneurs and government officials. Since its founding, the Platform program has held several national and regional meetings that have drawn good crowds. They have also managed several mini-exhibitions and begun an online platform for discussions. This nationwide network may now be ODIMM’s most important asset in the effort to encourage women’s entrepreneurship. The network is built on female focal points at the village level (870 women), each of whom has a tablet and can communicate directly with ODIMM, as well as with local women. The program has been embraced enthusiastically, whenever events are scheduled around the country. The program engages women directly with the government, both at the local (district and city) level and at the national level (through, for instance, a meeting with the Prime Minister). These encounters serve three purposes: (1) raising and sustaining awareness of the issues female entrepreneurs face; (2) organizing and engaging women-owned businesses collectively to be heard; and (3) disseminating information, including about programs, from ODIMM to the women. An important function that the Women’s National Platform is serving is to build-up a store of knowledge about women- owned businesses in Moldova—a database that places more emphasis on the start-up phase than the sample in the Enterprise Gender report. Thus far, the ODIMM staff have been able to disseminate short surveys through the focal points, who in turn are each assigned to get a certain number of responses, and they are able to get a very high and rapid response rate. This is an important function not only for research purposes, but also for collecting opinions, recruiting volunteers, and even learning about grievances. It may be of particular use to ODIMM in their role of developing recommendations for women’s economic empowerment in the National Framework. Supporting Women’s Entrepreneurship in Moldova 35 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 35 16-Mar-18 10:22:47 AM 3. Subsidizing and Facilitating Participation of Entrepreneurs in Fairs and Exhibitions ODIMM runs a special program to encourage entrepreneur participation in business fairs and exhibitions. Through this program, ODIMM subsidizes 50 percent of the participation tax at national exhibitions and fairs of businesses (about 1,400 beneficiaries). In 2016, a trade mission took 15 women to Poland. Most of the women were in textiles. As a result of the trip, all of the women made significant changes to their businesses. Two of them subsequently applied for a competitive project grant and won the award. A third is still in process. This mission, and other similar efforts, seem to have a positive effect on the participants. It would be helpful to have additional funding for more of them, but it would also be advisable to think about ways to bring inspiration and resources to the women rather than the other way around. 4. Memberships ODIMM participates in a number of international organizations and programs designed to support women in entrepreneurship. Most of these are online and thus far, the participation appears to be passive. It would be advisable for ODIMM to study ways of becoming more actively engaged with, for instance, the online Women’s Entrepreneurship Platform or of the Program of Competitiveness of Enterprises and Small and Medium –sized Enterprises 2014-2012 (COSME ). In addition to working with local women’s entrepreneurship groups and with related government agencies, ODIMM also partners with the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) and with the Center for Development. They also participated in the International Trade Centre (ITC)’s women’s vendor exhibition. The staff at ODIMM are concerned, rightly, that they need to be strategic about forming partnerships and about attracting and engaging with international programs. There are as yet untapped women’s economic empowerment resources that could be attracted to Moldova if funding was available for travel and perhaps for advice. D. Other Observations The passion that the ODIMM team has for supporting women entrepreneurs is observable. They have invested in understanding the women they are trying to serve and in designing suitable programs. They have built trust among those women, as is evident through the network they have created. It is important to develop and protect this enthusiasm and the progress the team has made. Several issues emerged during the fieldwork, in interviews with the ODIMM team as well as in interviews with others who work with them, that should be addressed as matters of personnel and institutional development. Effort should be put into ways of building the focus on women into everyday procedures and practices such that they will continue, regardless of who is in the leadership. Development plans for the people who work on the gender effort should be written and implemented. Particularly in view of how much this team has learned about women and business in Moldova, it will be important to retain and develop these people. There has apparently been some discussion about changing the relationship of ODIMM to the government, especially in comparison to nongovernmental organizations (NGO). A suggestion was made that perhaps ODIMM should compete with NGOs for funding each year. This is not a good idea. NGOs inevitably have their own agendas and cannot be relied upon to execute in concert with government objectives in the same way that a government agency will do. Allowing the effort to fragment among a raft of NGOs will likely undermine the success of the women’s entrepreneurship effort by creating duplication and inefficiency, as well as destroying the value of the network that ODIMM has built. It would be far wiser, as well as more consistent with how other governments handle such matters, to keep ODIMM in place as a government agency and allow them to award funds and manage programs that NGOs execute in concert with a unified women’s entrepreneurship strategy. That said, it is also important that attention be paid to building collaborative partnerships both locally and internationally that will maximize ODIMM’s resources and impact. The team expressed some concern that there were so many potential partnerships available that they needed advice on which to choose and how to manage them. This kind of concern about managing partnership is very common in the women’s entrepreneurship community right now, even among large international organizations. It would probably be wise to appoint or hire someone to give them advice in the partnership domain and perhaps provide suitable introductions. 36 Moldavija INDD Final.indd 36 16-Mar-18 10:22:47 AM To date, the ODIMM emphasis has been more on recruiting females into entrepreneurship than on supporting existing, mature women- owned businesses. This is natural, given the need to stimulate startups and to seed economic autonomy among the young. However, the team did express a desire to have content ready for all business levels involving entrepreneurial women. Gender data do suggest a need for supporting more advanced firms (as already described). Thus, it would be wise to make a conscious effort to expand the current emphasis on startups and the young (which should not be abandoned) to reach toward services appropriate to women in later stages of business development. There does also seem to be a need to develop more problem-solving capabilities, such as the trouble-shooting suggestions described here, which will be a different, more hands-on, kind of work than the courses and ther activities currently being offered. This will necessarily involve different platforms, new personnel, and different ways of reaching beneficiaries. Though it would be possible to develop such services and roll them out gradually, there will still need to be an upfront investment to further develop these capabilities WOMEN ENTREPRENEURS: SPECIAL CHALLENGES Many global agencies have taken an interest in helping women to found and grow enterprises. Over the past decade, lessons have been learned about the constraints specific to women as entrepreneurs. The following barriers have been present, to a greater or lesser degree, in countries around the world where programs for female entrepreneurs have been engaged: • The burden of care is the number one barrier to success for female entrepreneurs, as it is in every other aspect of the economy. Thus, any program designed to support women’s engagement in economics needs to understand and address this issue. • Capital assets—whether land, equipment, or investments—are almost entirely in the hands of males, worldwide. This means that female entrepreneurs are significantly disadvantaged, for systemic reasons, when it comes to meeting the capital requirements for founding and growing a business. • Male-dominated industries tend to be more lucrative than those friendly to females. Thus, women tend to cluster in less profitable sectors and experience higher obstacles when they try to break into more heavily “male” sectors. • Women’s access to markets is often constrained, especially in international trade and corporate or government procurement, as well as in any industry that is especially thought to be more appropriate for males. Women often offer suffer from information disadvantages, poor connections, and unfavorable contract terms, as well as stone-walling from trade groups. • Community and family attitudes often are not conducive to women trying to start and build their own businesses. • There is a worldwide gender gap in credit from banks. The problem is as much the banks’ willingness to work fairly with women as it is any shortcoming among female entrepreneurs. • Government corruption tends to affect women more heavily than men because they are more easily bullied and may feel less confident about regulations. The combination of the care burden—which reduces the hours and attention women can give to their enterprises—combined with lack of access to capital and markets, as well has exclusion from more attractive industries and unsupportive social attitudes discourage women from starting businesses, constrain their growth, and make it difficult for females to remain in control of their enterprises. Thus, any successful effort to encourage enterprise growth among females must attend to these factors. The analysis in this report proceeds from this understandin. INTRODUCTION Supporting Women’s Entrepreneurship in Moldova 37 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 37 16-Mar-18 10:22:48 AM Part B: Analysis 38 Moldavija INDD Final.indd 38 16-Mar-18 10:22:52 AM CHAPTER 4: OUTLINE OF ENTERPRISE GENDER SURVEY The Enterprise Gender Survey in Moldova was carried out by Magenta Consulting for the World Bank Group. The goal, objectives, and methodology of the study are presented in this chapter. A. Goal and oObjectives of the Study To 2016 study was designed to achieve the following objectives: • To outline the key differences in issues faced by male and female entrepreneurs and to measure the key obstacles for women entrepreneurs in Moldova; • To uncover the key knowledge gaps among women entrepreneurs, concerning the regulatory framework in Moldova; • To provide key policy recommendations for the government and the Ministry of Economy on actions to support women entrepreneurs, and also to inform the future ODIMM’s women entrepreneurship program; • To become a baseline for a potential panel that will make it possible to analyze the changes in the business environment over time; and • To stimulate systematic policy dialogue on the business environment and to help shape the agenda for reform. Methodology The methodology and the survey employed by the present study were developed by the World Bank Group. All aspects pertaining to the methodology and the survey are presented in this chapter. 1. Target Sample The target samples were micro, small, and medium private enterprises that conduct business in agriculture, manufacturing, or services and that operated in 2016. State-owned companies or non-profit organizations were excluded from the research. Companies from Transnistria – the left bank of the Nistru River – were not included in the study. Similarly, large enterprises were filtered out of the sample. 2. Sampling Frame The full database of registered firms in Moldova for 2015 was provided by the National Bureau of Statistics and served as the sampling frame. The original database included both state-owned and private firms, however, the sample was drawn from a database of only cleaned, private-owned firms. 3. Testing of the Sampling Frame The sample frame consisted of all firms registered in Moldova. The database was provided by the National Bureau of Statistics and included the universe of all firms. The database was cleared of state-owned enterprises. Then, a sample of 1076 enterprises was randomly selected to test the quality of the sample frame. In order to perform screening of 106 enterprises, a total of 584 companies were contacted, but. 65 percent of firms were unobtainable, 7 percent of firms were ineligible or out of target, and the screener refusal rate represented 11 percent. 4. Stratification The sampling frame was sorted in order to group firms into strata divided by region, type of enterprise (size), and industry. Companies from 4four regions – Chisinau (the capital), North, Center and South – took part in the study. These enterprises were further grouped based on industry – agriculture, manufacturing, and services - and on size – micro, small, and medium. Information from the database regarding location, number of employees, and economic activity was used for stratification purposes. The number of employees was used to determine the size of the company. Micro companies had 0-9 employees, small companies had 10-49 employees, and medium companies had 50-249 employees. 5. Selection of Firms within Strata Stratified random sampling was employed to select firms. Firms in the sampling frame were grouped into strata. Then, a sample of firms ten times the target number of interviews for the stratum was drawn randomly from each stratum in the sampling frame. Supporting Women’s Entrepreneurship in Moldova 39 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 39 16-Mar-18 10:22:52 AM 6. Sample The sample consisted of 300 enterprises and ensured an error margin of ±6 percent at a 95 percent confidence interval. The sample utilized stratified random sampling stratified by size, industrial sector, and location. To determine the number of interviews for each stratum, an optimized sample was computed. The resulting sample design was computed by the Excel add-in “Solver Pro.” The maximum cell size was pre-set to 32 and the minimum cell size was set to 2. The sample design is presented in Table 4. 1. Table 4.1. Sample Design Agriculture Manufacturing Services Total Micro 8 14 32 118 Chisinau Small 4 13 2 Medium 2 11 32 Micro 9 6 2 64 North Small 15 11 2 Medium 7 4 8 Micro 10 8 7 68 Center Small 14 12 2 Medium 3 4 8 Micro 7 5 2 50 South Small 14 7 2 Medium 5 3 5 Total 98 98 104 300 Quota sampling was employed to ensure that 100 interviews were conducted with male- owned establishments and 200 interviews with female-owned establishments. For each cell, 67 percent of interviews were conducted with female-owned companies and 33 percent were conducted with male-owned companies. In consequence, 202 interviews were conducted with female-owned companies and 98 interviews were conducted with male-owned companies. In addition, two interviews were conducted with male-owned small agribusinesses in Chisinau and two interviews were conducted with small agriculture companies in the Center region. Also, two interviews each were conducted with female-owned medium manufacturing companies in both the south of the country and in Chisinau. Companies in these two categories were impossible to find because of the limited nature of the sampling frame and the unwillingness of companies to cooperate. The distribution of the final sample per strata and gender of owners is presented in Table 4.2. 40 Moldavija INDD Final.indd 40 16-Mar-18 10:22:52 AM Table 4.2 Final Sample Gender of owners Region Size Industry Female Male Total Agriculture 5 3 8 Micro Manufacturing 10 4 14 Services 22 10 32 Agriculture 2 0 2 Chisinau Small Manufacturing 10 3 13 Services 1 1 2 Agriculture 1 1 2 Medium Manufacturing 9 4 13 Services 22 10 32 Total 82 36 118 Agriculture 6 3 9 Micro Manufacturing 4 2 6 Services 1 1 2 Agriculture 10 5 15 North Small Manufacturing 7 4 11 Services 1 1 2 Agriculture 5 2 7 Medium Manufacturing 3 1 4 Services 5 3 8 Total 42 22 64 Agriculture 7 3 10 Micro Manufacturing 5 3 8 Services 5 2 7 Agriculture 11 5 16 Center Small Manufacturing 8 4 12 Services 1 1 2 Agriculture 2 1 3 Medium Manufacturing 3 1 4 Services 6 2 8 Total 48 22 70 Agriculture 5 2 7 Micro Manufacturing 3 2 5 Services 1 1 2 Agriculture 10 4 14 South Small Manufacturing 5 2 7 Services 1 1 2 Agriculture 3 2 5 Medium Manufacturing 0 1 1 Services 3 2 5 Total 31 17 48 TOTAL 202 98 300 Supporting Women’s Entrepreneurship in Moldova 41 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 41 16-Mar-18 10:22:53 AM 7. Structure of the Questionnaire The questionnaire was developed by the World Bank Group. The questionnaire included 109 questions distributed in 10 categories. The original version of the questionnaire was formulated in English. In order to be used in Moldova, the questionnaire was translated into Romanian and Russian languages by certified translators. Then the questionnaire was translated back into English, and bilingual consultants at Magenta Consulting compared the original with the back that English version and corrected any inconsistencies. 8. Questionnaire Testing The questionnaire was piloted on a sample of 12 firms. The Romanian version of the questionnaire was tested eight times, while the Russian version was tested 4four times. The piloting of the questionnaire was carried out with a senior consultant who in addition to testing the aspects related to the questionnaire also tested the aspects related to the selection of the respondent. The interviews were carried out in the language preferred by the respondent. 9. Data Collection Data was collected between January 2, 2017 and March 28, 2017. Quantitative primary data was collected through face-to-face interviews based on the structured questionnaire provided by the World Bank Group. Respondents were company owners and representatives of companies, usually individuals in managerial positions. The interviews were carried out by the team of interviewers at Magenta Consulting. Interviewers were trained at the beginning of the project regarding the aim of the project and the specifics of the questionnaire. All questionnaires were verified by trained supervisors. Supervisors were instructed by the WBG Task Team Leader (TTL). Data entry precision waschecked by supervisors, who also revised the database as necessary and compared input data with the original. Interviews were conducted in the native language of the respondent. Completion of 60 percent of interviews was verified by return calls. Data was collected in predefined groups that were divided by region (Chisinau, North, Center, and South), size of the company (micro, small, and medium) and industry (agriculture, manufacturing, and services). Companies were contacted an average of seven times to obtain an answer. Non-responsive contacts were called multiple times at different times of the day and different days of the business week to increase the chance of contacting a potential respondent. No incentives were offered for participation in the study. 10. Quality Control Enumerator training was conducted to explain the purpose of the study and to answer any questions. Supervisors were instructed by the WBG TTL. Data entry precision was ensured by supervisors. Supervisors revised the database and compared input data with the original. 11. Response rate An interview conversion rate of 7 percent was achieved. The interview refusal rate was 11.5 percent, and 56 percent of firms in the sample frame were unobtainable, ineligible, or out of target. The details about response rates per strata, as well as the number of companies that were unobtainable or ineligible, are shown in Table 4.3 42 Moldavija INDD Final.indd 42 16-Mar-18 10:22:53 AM Table 4.3 Interview Conversion, Interview Refusal, Rate of Unobtainable, Ineligible, and Out- of- Target Companies Total Nr of Interview Interview Inelegible + Unobtainable Region Size Industry contacts intervie Conversion refusal out of target % issued ws % % % Chisinau Micro Agriculture 198 8 4.0 10.1 42.9 32.3 Manufacturing 289 14 4.8 10.0 43.3 32.5 Services 709 32 4.5 12.4 42.6 30.9 Small Agriculture 37 2 5.4 35.1 29.7 10.8 Manufacturing 160 13 8.1 26.9 14.4 33.1 Services 50 2 4.0 20.0 4.0 12.0 Medium Agriculture 13 2 15.4 7.7 0.0 0.0 Manufacturing 110 13 11.8 26.4 13.6 20.9 Services 412 31 7.5 15.5 20.1 38.3 North Micro Agriculture 119 9 7.6 4.2 34.5 43.7 Manufacturing 105 6 5.7 1.9 11.4 26.7 Services 34 2 5.9 11.8 29.4 17.6 Small Agriculture 161 15 9.3 6.8 7.5 15.5 Manufacturing 103 11 10.7 8.7 40.8 30.1 Services 49 2 4.1 10.2 4.1 26.5 Medium Agriculture 69 7 10.1 13.0 29.0 36.2 Manufacturing 36 4 11.1 19.4 25.0 41.7 Services 80 8 10.0 17.5 0.0 27.5 Centre Micro Agriculture 143 10 7.0 8.4 18.9 20.3 Manufacturing 124 8 6.5 8.1 15.3 25.0 Services 100 7 7.0 4.0 11.0 25.0 Small Agriculture 186 17 9.1 9.1 4.3 29.6 Manufacturing 140 12 8.6 14.3 0.7 20.7 Services 50 2 4.0 10.0 0.0 12.0 Medium Agriculture 30 3 10.0 0.0 0.0 20.0 Manufacturing 37 4 10.8 13.5 43.2 18.9 Services 78 8 10.3 12.8 24.4 37.2 South Micro Agriculture 113 7 6.2 3.5 50.4 33.6 Manufacturing 110 5 4.5 6.4 58.2 28.2 Services 20 2 10.0 0.0 15.0 5.0 Small Agriculture 188 14 7.4 5.9 43.6 23.9 Manufacturing 63 7 11.1 9.5 0.0 20.6 Services 34 2 5.9 11.8 41.2 38.2 Medium Agriculture 50 5 10.0 10.0 42.0 28.0 Manufacturing 21 1 4.8 28.6 19.0 42.9 Services 50 5 10.0 2.0 2.0 72.0 Total 4271 300 7.02 11.47 26.72 29.38 12. Data Entry Data was entered into an online database by a trained operator. The collected questionnaires were introduced in a platform with an online interface which subsequently generates a database in SPSS format. 13. Data Analysis and Weighting Procedures Data analysis was performed using in IBM SPSS version 21. For weighting purposes a correction was made to the sample frame that represented the share of eligible establishments compared to the total number of contacts made during field work. For this study, the category of eligible firms represented contacts from the sample frame that were:: • Eligible firms with the correct name and address • Eligible firms with a different name but the same address • Eligible firms that moved but were traced • Firms reached but where an answering machine was on • Firms reached but where a fax line was on • Firms reached but that refused to answer the screener ’s questions Supporting Women’s Entrepreneurship in Moldova 43 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 43 16-Mar-18 10:22:53 AM Furthermore, a smoothing mechanism was implemented to produce relative weights based on the three products of the relative rates for each sector, size, and region. In addition, gender-based interview quotas were accounted for. To this end, the percentage of firms that were female-owned was estimated for each cell of the sampling matrix (including size of the firm and the industry). Then, the estimated universe was split into male and female sections using these ratios. Finally, to produce weights, the estimated universe split by gender was divided by the number of completed interviews in each cell of the sampling matrix (including size, industry, and region). C. Limits of the Study The current study has the following limitations. Data collection was influenced by the poor quality of the sampling frame. Although the database compiled by the National Bureau of Statistics of the Republic of Moldova had entries for all registered enterprises in Moldova, the quality of data was not ensured by a system of checks within the bureau. Thus, some of the data in the database is outdated or incorrect. In relation to the quality of the sampling frame it should be noted that during the testing of the sampling frame, 65 percent of contacts were unobtainable. During data collection, even after nonresponsive contacts were called a minimum of 10 times, 56 percent% of companies were unobtainable, ineligible, or out of target. Such a high number of unobtainable, ineligible or out of target companies points to the conclusion that the sampling frame was inaccurate. To avoid this issue in the future, researchers should use databases provided by other institutions. For instance, the database compiled by the State Fiscal Service can provide more accurate data about enterprises. Another limitation results from the gender quota sampling that was used. Considering that 200 female-owned and 100 male-owned companies were interviewed, it is possible that female-owned companies were over-represented and that male-owned companies were under-represented in the study. This bias was limited by weighting the data according to the distribution of female-owned and male- owned companies in different industries in the population. In addition, during data collection it was difficult to fulfill the gender quotas in some fields. For instance, it was difficult to find female- owned companies in agriculture. This practical difficulty stands in contrast to available statistical data which shows that there are more female-owned companies in agriculture than in other economic sectors. One explanation is that Iit is believed, that in agriculture, while a number of female-owned companies are registered as being owned by females, in practice, these female owners do not take part in the activity of the establishment. Another limitation of the study is that respondents did not always report data regarding the company from records, but made estimates based on their recall of the data, which resulted in approximated estimates. This limitation especially is a concern with the data regarding sales turnover. Also, because the interview acceptance rate constituted just 7 percent, it is likely that some other categories of respondents were under- represented. For instance, given that the mean age of the sample was 43, it is possible that older entrepreneurs were more receptive to participate in the study than younger entrepreneurs, which consequently resulted in an older sample being used for the study. Any conclusions drawn from this research should take into account that the sample represented the opinion of older entrepreneurs. Future research may include age-based quotas in the study design to ensure that the opinion of younger generations of entrepreneurs is surveyed. Such age-based quotas however will prolong the data collection process. It should be noted that a low response rate was also due to low cooperation rates. Many potential respondents refused to participate in the study because of the time (45 minutes on average) required to complete the interview. To increase cooperation rates in the future, whoever conducts the surveys should consider using a shorter questionnaire, or completing the interviews by means of computer-assisted telephone interviewing (CATI). 44 Moldavija INDD Final.indd 44 16-Mar-18 10:22:53 AM CHAPTER 5: DATA ON COMPANIES AND OWNERS This chapter reviews the data from the Enterprise Gender Survey regarding companies and their owners. The chapter is divided into two subchapters. The first sub-chapter focuses on descriptive data regarding companies, and the second sub-chapter provides a description of company owners. Significant differences pertaining to the gender of the owner and to the size, sector, or geographical location of the business, are presented. A. Characteristics of Enterprises This sub-chapter on characteristics of enterprises provides information regarding the legal status of companies, the number of years the business has been in operation (versus the number of years the business was legally registered), ownership of the enterprise, characteristics of the management, and the number of employees when the business started. 1. Legal Status of Companies In Moldova, a majority of firms are registered as limited liability companies. In fact, 87 percent of all Moldovan firms have the legal status of limited liability companies. The second most common legal form for Moldovan business establishments is the sole proprietorship, with 12.5 percent of firms are registered as sole proprietorships. Meanwhile, only about 0.9 percent of firms are joint-stock companies. There are differences when it comes to the incidence of firms of a given form among the representatives of either gender (Figure 5.1). For example, men are more likely to register limited liability companies then women. Of male-owned businesses, 88 percent are limited liability companies, while of female-owned enterprises, 81 percent are limited liability companies. In the meantime, joint-stock companies are the most gender inclusive, because 87 percent% of all joint-stock companies have female owners. There are industry differences when it comes to the prevalence of company legal forms, despite the fact that limited liability companies are the preferred legal form in all economic sectors. In agriculture and retail trade, the number of sole -proprietorships is greater than in other economic sectors. This tendency is especially noticeable among male-owned businesses, of which, in agriculture, 43 percent are sole proprietorships. Nonetheless, among female-owned businesses in agriculture, there are also more firms registered as sole proprietorships than in other economic sectors. Of female-owned agricultural businesses, 22 percent are sole proprietorships. It appears that more sole- proprietorships are registered in retail than in any other service category. This tendency applies to both female-owned and male -owned companies, although in retail, there are 13 percentage points more female-owned sole proprietorships than male-owned companies – 30 percent male-owned retail businesses and 43 percent female-owned retail businesses. Figure 5.1. Distribution of Companies Based on Company Legal Form, Type of Company, % Female -owned Male -owned Total, N=4281 81 16 4 N=15905 88 12 0 Agriculture, N=308 72 22 6 N=1091 57 43 0 Manufacturing, N=528 91 53 N=1423 91 81 Retail trade, N=1357 57 43 0 N=4188 70 30 0 Industry Wholesale trade, N=773 99 0 1 N=94 100 0 Construction, N=211 94 06 N=3251 100 0 Hotel or restaurant, N=187 49 1 50 N=744 100 0 Other services, N=916 100 0 N=5114 100 0 Micro, N=2962 79 21 0 N=11885 85 15 0 Small, N=1160 84 6 10 N=3488 99 1 0 Size Medium, N=158 76 0 24 N=532 92 4 4 Chisinau, N=2628 96 41 N=9749 92 80 North, N=631 19 63 18 N=2313 90 10 0 Region Center, N=775 79 19 2 N=2921 93 70 South, N=247 81 18 1 N=921 28 71 1 Limited liability company Sole proprietorship Joint-stock company Partnership Other Don't know Supporting Women’s Entrepreneurship in Moldova 45 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 45 16-Mar-18 10:22:53 AM There are also regional differences when it comes to the incidence of certain legal forms. In general, sole proprietorships are more common outside the capital city of Chisinau. Thus, 90 percent of all registered sole proprietorships are located outside Chisinau, while 7 percent of firms in the capital bear the same legal status. Data shows that there are tendencies for female-owned businesses in the north of the country to be registered as sole proprietorships (63 percent of all businesses in the North are registered as such). In the South, 71 percent of male-owned companies are sole proprietorships. 2. Number of Years the Business has been Registered and in Operation The large majority of companies were registered when they were set up. In fact, just 4 percent of businesses were not formally registered when they started operation. Most of these companies are providing wholesale trade services, are micro companies, are located in the center, and were subsequently registered as limited liability companies. The mean time of operation without formal registration is six years. There are statistically significant differences in the number of years female-owned and male-owned companies operate (u=26775022, p=.00). The average number of years female-owned companies are in operation is higher (11 years) than the average number of years male-owned companies operate (8 years). Female-owned companies in the hotel/restaurant, retail, and manufacturing industries are older than other female-owned companies. Thus on average, female-owned companies in the hotel/restaurant industry operate for 18 years, in retail for 13 years, and in manufacturing for 12 years. (See Figure 5.2). The age of the company increases with its size. While micro female-owned companies have been in operation on average for 10 years, medium female-owned companies operate for 18 years. Figure 5.2: Mean Time Companies have been Registered and in Operation, Type of Company, Years Female -owned Male -owned Total, N=4281 11 11 N=15905 8 11 8 Agriculture, N=308 11 N=1091 9 12 9 Manufacturing, N=528 12 N=1423 11 13 11 Retail trade, N=1357 13 N=4188 10 10 Industry Wholesale trade, N=773 9 17 10 N=94 17 Construction, N=211 8 N=3251 9 8 9 Hotel or restaurant, N=187 18 N=744 3 18 3 Other services, N=916 8 N=5114 7 8 7 Micro, N=2962 10 N=11885 6 10 7 Small, N=1160 13 N=3488 14 Size 13 14 Medium, N=158 18 N=532 17 18 17 Chisinau, N=2628 9 N=9749 8 9 8 North, N=631 18 N=2313 7 7 Region 18 10 N=2921 10 Center, N=775 11 11 12 N=921 14 South, N=247 12 14 Mean time in operation Mean time registered 3. Ownership of the Enterprise By large, most Moldovan companies are owned by domestic natural and private legal persons. In this sense, 91 percent of ownership of Moldovan companies belongs to local individuals, companies, or organizations. It happens, that domestic private ownership is larger for female-owned companies than for male-owned companies (98 percent for female- owned companies compared to 89 percent male-owned companies), and this difference is statistically significant (u=29940092.0, p=.00). In agriculture, manufacturing, retail, and wholesale industries, male-owned companies tend to have larger amounts of shares owned by foreign persons, than female-owned companies (u’s >33302.5, p’s < .006). The difference is largest for retail trade. In the latter industry, 27 percent of shares in male-owned companies are owned by foreign persons, while in female- owned equivalents, just 1 percent is owned by foreign individuals or enterprises. (See Figure 5.3) 46 Moldavija INDD Final.indd 46 16-Mar-18 10:22:53 AM Looking at differences in ownership of small enterprises owned by women and by men, it appears that female-owned firms in this category are almost entirely owned by domestic individuals and establishments, with 99 percent of ownership being held by nationals. Meanwhile, male-owned companies are owned up to 67 percent by local individuals and establishments. Further statistical analysis shows that this difference is statistically significant (u=1350880.0, p=0.00). In fact, small male-owned companies are more likely than small female-owned companies to be owned by foreign persons (u=1350880.0 , p= .00). Thus, 33 percent of ownership in small male-owned enterprises is held by foreign natural, and/or legal persons, and just 1 percent in small female-owned companies is held by foreign individuals and entities. In Chisinau, the North and the Center of the country, male- owned companies have larger shares of foreign ownership than female-owned companies (u’s>714656.0, p’s <.000). Figure 5.3: Owners of Companies, Type of Company, % Female -owned Male -owned Total, N=4281 98 2 N=15905 89 11 Agriculture, N=308 98 2 N=1091 93 7 Manufacturing, N=528 99 1 N=1423 91 9 Retail trade, N=1357 99 1 N=4188 73 27 Industry Wholesale trade, N=773 93 6 N=94 80 20 Construction, N=211 100 0 N=3251 100 0 Hotel or restaurant, N=187 100 0 N=744 100 0 Other services, N=916 100 0 N=5114 91 9 Micro, N=2962 98 2 N=11885 95 5 Small, N=1160 99 1 N=3488 Size 67 33 Medium, N=158 92 7 N=532 87 13 Chisinau, N=2628 97 3 N=9749 83 17 North, N=631 100 0 N=2313 98 2 Region Center, N=775 100 0 N=2921 98 2 South, N=247 100 0 N=921 100 0 Private domestic individuals, companies or organizations Private foreign individuals, companies or organizations Government or Municipality Other In general, 7 percent of companies are part of larger establishments. Looking at differences between the genders of owners, it can be noted that more male-owned companies are part of larger companies than female-owned companies (8 percent of male- owned companies and 3 percent of female-owned companies). This difference is statistically significant (x2 (1) = 127.6, p =.00). However, the difference does not persist in all industries. In agriculture, for instance, more female-owned than male-owned companies are part of larger entities (x2 (1) = 26.62, p = .00). In other sectors, more male-owned companies are part of other companies. As figure 45.4 details, in manufacturing. 11 percent of male-owned companies and 3 percent of female-owned companies are part of larger firms. The difference is statistically significant (x2 (1) = 31.52 , p = .00). In retail and wholesale, the differences are also significant (x2’s(1) > 118.7, p’s <.00). In both these sectors, all female-owned companies declared not being not part of larger companies. Meanwhile, 9 percent of male-owned companies in retail and 20 percent of male-owned companies in wholesale declare being part of larger entities. The trend is true of other services but not in the hotel/restaurant and construction industries. Thus, in the hotel/restaurant industry, there are no differences as to the gender of owners and the likelihood of a firm being part of larger entities. Both female-owned and male-owned companies in the hotel/restaurant industry are independent. In construction, however, male-owned companies are individual enterprises, while 45 percent of female-owned companies in construction are part of larger enterprises. There are some dynamics regarding the way female-owned and male- owned companies of different sizes report being part of larger entities. Thus, more micro (8 percent) and small (10 percent) male- owned companies declare being part of larger establishments (x2’s(1) > 58.4, p’s >.00). In Chisinau and the Ccenter region, male-owned companies tend to be part of larger companies at a higher rate than female-owned establishments. In Chisinau, the chi- square statistic (x2 (1)= 62.9, p= .00) points to the fact that male-owned companies are part of larger entities at a rate 5 percentage points greater than the rate for female-owned companies. Similarly, in the Ccenter region, male-owned companies are significantly more likely to be part of larger entities than female-owned firms (x2 (1)= 83.8, p= .00). Supporting Women’s Entrepreneurship in Moldova 47 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 47 16-Mar-18 10:22:54 AM Figure 5.4: “Is the Firms that are Part of a Larger Establishment,?”, Type of Company, % Female -owned Male -owned Total, N=4281 3 97 N=15905 8 92 Agriculture, N=308 6 94 N=1091 1 99 Manufacturing, N=528 3 97 N=1423 11 89 Retail trade, N=1357 0 100 N=4188 9 91 Industry Wholesale trade, N=773 0 100 N=94 20 80 Construction, N=211 45 55 N=3251 0 100 Hotel or restaurant, N=187 0 100 N=744 0 100 Other services, N=916 0 100 N=5114 15 85 Micro, N=2962 4 96 N=11885 8 92 Small, N=1160 1 99 Size N=3488 10 90 Medium, N=158 13 87 N=532 9 91 Chisinau, N=2628 5 95 N=9749 10 90 North, N=631 0 100 N=2313 0 100 Region Center, N=775 1 99 N=2921 13 87 South, N=247 0 100 N=921 0 100 Yes No Generally, women own about 76 percent of shares in companies where they have ownership (Figure 5.5). The size of ownership varies much depending on the size of the establishment. Thus, women own more in small and micro-sized companies (80 percent and 76 percent respectively) and less in medium-sized firms (45 percent). Female-shares vary based on the industry the business works in (Figure 5.5). Post-hoc analysis of an analysis of variance (ANOVA) showed that differences between the mean ownership of women in all industries are significantly different, (p’s < .000), except the difference of ownership in agriculture and manufacturing, retail trade, and hotel/restaurant services, as well as between wholesale trade and construction (mean differences <31.42, p’s >.074).Women hold the largest shares in companies that work in the hotel/restaurant industry (where female ownership averages 94 percent) and retail (where women own 91 percent). Women own the least in construction (72 percent), manufacturing (61 percent), and agriculture (63 percent). Analysis contrasting the size of female ownership in difference geographical areas revealed that women’s shares vary regionally (F(3,4266)=99.17, p=.00). The amount of shares varies between all regions except the Chisinau and center regions where women hold similar amounts of shares (75 percent and 77 percent respectively). Meanwhile, women own the largest shares in the north of the country (88 percent), and the least shares in the South (54 percent). Figure 5.5: Size of Female Ownership, Average % Total, N=4281 76 Agriculture, N=308 63 Manufacturing, N=528 61 Retail trade, N=1357 91 Industry Wholesale trade, N=773 70 Construction, N=211 72 Hotel or restaurant, N=187 94 Other services, N=916 71 Micro, N=2962 76 Small, N=1160 80 Size Medium, N=158 45 Chisinau, N=2628 75 North, N=631 88 Region Center, N=775 77 South, N=247 54 48 Moldavija INDD Final.indd 48 16-Mar-18 10:22:54 AM 4. Number of Employees and Managers when the Business was Set Up (Table 5.1) The average number of employees in now-micro companies when they started was 7. Now -micro male-owned companies hired on average 7 employees, when they were set up, while now-micro female-owned companies hired on average 6 employees when they were set up. The latter difference is statistically significant (u=14188812.0, p=.00). The average number of employees in now-small companies was 8 when they started. Now-small female-owned companies hired on average 11 employees, and now-small male-owned companies hired 7 employees. The difference is statistically significant (u=1811975.0, p=.00). The average number of employees in now-medium companies is also larger in female- owned companies (u=30022.5, p=.008), representing 87 employees in now-medium sized female-owned companies and 56 employees in now-medium male-owned companies. Looking at differences in different industries (Table 5.1), with some exceptions, it is observable that now-micro female-owned companies started out with more employees that now-micro male-owned companies. The largest difference is in the manufacturing and the hotel/restaurant industries in which male-owned companies were set up in each industry with 3 employees, while female-owned companies started out with 6 and 16 employees, respectively. The figures are the reverse for other servicesexcept for the retail, wholesale, construction, and hotel/restaurant industries. In other services, male-owned companies started out with 12 employees but female-owned companies started with 6 employees. The trends are similar for now-small and now-medium companies. There are regional differences when it comes to the number of employees firms have hired when they were set up. For instance, the number of employees when businesses were started is statistically significantly higher for female-owned companies in the North than for male-owned companies in the same region (u’s>20979,.0, p’s =.00). The trend is valid for now-micro and now-small companies in the North. In the center of the country there is a similar trend for all type of companies. However, in Chisinau, it appears that now-medium female-owned companies started with fewer employees (32) than now-medium male-owned companies (42), but the difference is not significant (u=7080720.0, p=.075). Thus, in Chisinau male-owned medium sized companies are not more likely to have started with more employees than female-owned now- medium companies. Table 5.1. Average Number of Employees when the Business was Set up, Type of Company, Persons Female-owned Male-owned Micro Small Medium Micro Small Medium Mean Nr of Mean Nr of Mean Nr of Mean Nr of Mean Nr of Mean Nr of employees employees employees employees employees employees Total, N=20127 6 11 87 7 7 56 Industry Agriculture, N=1393 6 22 103 4 24 119 Manufacturing, N=1925 6 19 106 3 10 15 Retail trade, N=5542 5 5 27 4 6 44 Wholesale trade, N=846 2 2 61 N/A N/A 28 Construction, N=3462 8 20 24 4 3 7 Hotel or restaurant, N=928 16 17 3 N/A N/A Other services, N=6031 6 1 122 12 5 207 Region Chisinau, N=12318 6 6 32 8 6 42 North, N=2944 10 17 104 2 8 70 Center, N=3696 3 20 166 2 7 18 South, N=1168 5 19 97 12 9 123 On average companies have two managers. The number of managers increases as the size of the establishment grows, so that, while on average micro firms have two managers, small enterprises have 4four managers, and medium enterprises have six managers. The number of managers in female-owned companies is significantly larger than in male-owned companies (u=29373669.5, p=.00). In agriculture and manufacturing female-owned companies have significantly more managers than male-owned companies (u’s>100317.5, p’s<.00), while in services like retail, and the wholesale, industry the number of managers in male-owned companies is significantly larger than in female-owned equivalents (u’s >20501,0, p’s < .00). (For details on the average number of managers see Figure 5.6). Supporting Women’s Entrepreneurship in Moldova 49 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 49 16-Mar-18 10:22:54 AM In the capital and the north of the country, female-owned companies tend to have significantly more managers than male-owned companies (u’s >552656.5, p<.00). Thus, while on average female-owned companies have three managers, male-owned companies have two managers. In the South of the country the situation is reverse- male-owned companies tend to have significantly more managers than female-owned companies (u73152,.5.p=.00). Figure 5.6: Average Number of Managers and Percentage of Female Managers, Type of Company, Persons, % Number of Managers Percentage of female managers Total, N=20186 3 58 2 34 Agriculture, N=1399 3 54 2 33 Manufacturing, N=1952 3 64 2 43 Retail trade, N=5545 2 53 3 26 Industry Wholesale trade, N=867 5 55 11 26 Construction, N=3462 3 27 2 41 Hotel or restaurant, N=931 6 73 4 50 Other services, N=6031 2 69 2 36 Micro, N=14847 2 65 2 40 Small, N=4648 6 48 Size 4 26 Medium, N=690 6 48 7 33 Chisinau, N=12377 3 59 2 31 North, N=2944 3 55 48 Region 2 Center, N=3696 2 57 3 37 South, N=1168 2 49 2 12 Female-owned Male-owned The percentage of female managers in male- and female-owned companies (Figure 5.6) is significantly different (u=6503775.0, p=.00). Female owned companies tend to hire female managers at a rate 24 percentage point higher than male-owned companies. This tendency is present in all regions of the country, but is most prominent in the South where just 12 percent of managers in male-owned companies are women. The gender discrepancy is felt most in micro-sized companies, in manufacturing, the hotel/restaurant industry, and other services except for retail, wholesale, and construction. B. Characteristics of Entrepreneurs This section on characteristics of entrepreneurs sheds light on important features of business- owners in Moldova. Aspects related to business ownership, as well as personal characteristics of owners, are examined. With reference to business ownership, it offers information about the size of ownership, duration of ownership, means of ownership acquisition, financial requirements for ownership, the main source of funds used to acquire business ownership, the main reasons to engage in business, and incidences of managerial activity among business owners. In regards to personal characteristics of business owners, the report presents conclusions regarding age, education, marital status, number of children, and aspects related to children and childcare. 1. Size of Ownership, Means of Ownership Acquisition and Financial Requirements for Ownership On average, male business owners possess larger shares than female business owners (Figure 5.7). While female owners own about 71 percent of assets in a company, male owners hold 90 percent (u=8704945.,0, p=.00). The size of ownership varies based on the size of the business and the industry, but in all types of companies, male owners hold larger shares than female owners. As Figure 5.7 shows, female ownership is smallest in wholesale and construction, and small and medium firms. 50 Moldavija INDD Final.indd 50 16-Mar-18 10:22:54 AM Figure 5.7: Size of Ownership of Female and Male Business Owners, % Female Male Total, N=14366 -71 90 Agriculture, N=895 -71 79 Manufacturing, N=1272 -70 85 Retail trade, N=3755 -81 100 Industry Wholesale trade, N=433 -48 61 Construction, N=3230 -46 99 Hotel or restaurant, N=928 -95 100 Other services, N=3852 -61 75 Micro, N=11718 -73 90 Small, N=2428 -66 91 Size Medium, N=220 -48 73 Chisinau, N=8690 -68 86 North, N=2602 -95 97 Region Center, N=2164 -59 93 South, N=910 -53 98 The data shows that 91 percent of business owners acquired ownership of the business by founding it. (See Figure 5.8). Data also shows that men are more likely than women to set up a business – 93 percent of male owners founded the firm, while 85 percent of female-owners acquired the business by setting it up. Female owners are much more likely than their male counterparts to inherit a business that was established by their spouse or other family member. In this sense, 9 percent of female-owners have declared that they inherited the business, while no male-owner declared that. In addition, more women (8 percent) than men (0.1 percent) in business have acquired ownership of a firm through privatization. It appears that female owners that set up agribusiness are as likely as male owners to have founded the firm. But in retail, and especially wholesale, female owners are more likely to have inherited the business. In wholesale, 33 percent of female business owners said they inherited the firm. In addition, this type of ownership acquisition is more common in the center of the country (33 percent of female owners in the area said they inherited the business). Figure 5.8: Incidence of Ownership Acquisition among Female and Male bBusiness Owners, % Female Male Total, N= 2253 82 9 1 8 0 N=12114 93 070 h er rth u m all o es t of de de ng e tal ut nt No na u m cr vic an on tra tra uri ur To Agriculture, N= 104 94 030 3 N=791 94 05 1 isi edi S Mi ser ur cti ale l act ult he res nst ho Re an Ag r ta ru les tai uf ric Manufacturing, N= 279 93 2411 N=993 100 0 M Retail trade, N= 872 89 11 0 N=2883 100 0 Industry Wholesale trade, N= 280 67 33 0 N=153 76 0 24 0 Ot or Co W Construction of, N= 10 100 0 N=3220 77 0 23 0 Hotel or restaurant, N= 185 0 1 99 0 N=744 100 0 tel Ho Other services, N= 523 100 0 N=3329 100 0 Micro, N= 1896 85 10 050 N=9822 92 080 Small, N= 326 68 22 29 0 N=2102 Size 98 2 00 Medium, N= 30 82 05 6 6 N=189 72 1 21 6 Ch M Chisinau, N= 1255 84 8 0 8 0 N=7435 90 0 10 0 North, N= 508 81 0 18 0 N=2093 1 98 2 00 Region Center, N= 291 66 33 0 N=1873 1 0 99 1 0 So Ce South, N= 198 96 040 N=712 99 01 Founded the rm Inherited the rm from a spouse or other family member Purchased an existing rm In the course of privatization Don't know Supporting Women’s Entrepreneurship in Moldova 51 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 51 16-Mar-18 10:22:54 AM Privatization among female business owners occurred more often in the North than in other regions. For instance, 18 percent of female owners in Chisinau declared obtaining ownership of the business through privatization. As wellIn addition, privatization is more common among female-owners of companies in the hotel/restaurant industry – 99 percent of these owners declared privatizing their business. Fewer female owners than male owners gained ownership of the business by purchasing an existing firm. Nonetheless, among female-owners, the practice is more prevalent in medium companies, where 5 percent of women that own assets in medium companies declared purchasing an existing company, and in manufacturing businesses, where 4 percent of women declared obtaining ownership by purchase. Most business owners (71 percent) required funds in order to obtain ownership of their business (Figure 5.9). Although 71 percent of men said they needed funds for business ownership, and 72 percent of women claimed the same, this difference is not significant. Figure 5.9: “In Incidence of Requiring Funds for Acquiring Ownership of the Firm, % Female Male Total, N=2253 71 29 N=12114 71 29 Agriculture, N=104 80 20 N=791 84 16 Manufacturing of, N=279 77 23 N=993 64 36 Retail trade of, N=872 79 21 N=2883 100 0 Wholesale trade of, N=280 66 34 N=153 88 12 Construction of, N=10 74 26 N=3220 54 46 Hotel or restaurant, N=185 1 99 N=744 100 0 Provide services of, N=523 82 18 N=3329 55 45 Micro, N=1896 73 27 N=9822 67 33 Small, N=326 62 38 N=2102 92 8 Medium, N=30 84 16 N=189 73 27 Chisinau, N=1255 59 41 N=7435 57 43 North, N=508 79 21 N=2093 99 1 Center, N=291 95 5 N=1873 87 13 South, N=198 100 0 N=712 99 1 Yes No Don't know Major sources of funds for acquisition of business ownership are personal savings. The statement holds true for both male and female business people. On the other hand, women declared using extended family resources as the main source of funding for business acquisition more often than men–35 percent of female business owners said they used family resources, while just 25 percent of men declared the same. Meanwhile, both 21 percent of male owners and 21 percent of female owners used loans from banks to acquire their business ownership. (See Figure 5.10) About 11 percent of women in agriculture, in contrast to men and women in other sectors, received financial assistance through state programs in order to set up their business.In addition, 32 percent of female- owners of companies in agriculture and 63 percent in manufacturing have received loans from banks or financial institutions to cover expenses related to business acquisition. It appears that owners of small companies, more so than micro and medium companies, received loans to start business. Figure 5.10 shows that female owners of micro companies relied more on personal savings and extended family resources to obtain ownership of business. Looking at geographical differences it should be noted that women in the south of the country relied more on funds obtained through loans, while women in the center and north of the country, as well as the capital, made more use of personal or family savings. 52 Moldavija INDD Final.indd 52 16-Mar-18 10:22:54 AM Figure 5.10: Sources of Funding for Acquisition of Business, Gender, % Female Male Total, N=1609 37 35 21 61 1 0 N=8625 42 25 0 1 21 10 Agriculture, N=83 52 3 32 30 11 N=666 74 0 3 24 Manufacturing of, N=214 29 2 63 050 1 N=636 39 14 11 0 24 12 Retail trade of, N=687 29 66 50 N=2883 17 70 0 12 Industry Wholesale trade of, N=185 50 0 50 0 N=135 85 0 0 15 Construction of, N=7 35 65 0 N=1731 47 3 0 50 Hotel or restaurant, N=2 100 0 N=744 100 0 Provide services of, N=431 47 22 31 0 N=1831 41 0 19 41 0 Micro, N=1381 41 40 11 7 0 1 N=6564 52 32 1 14 1 0 Small, N=203 13 1 82 130 N=1923 9 4 87 0 Size Medium, N=25 30 42 21 0 8 N=137 46 11 28 0 15 0 Chisinau, N=735 58 14 14 13 1 0 N=4224 58 20 0 21 0 North, N=400 8 89 30 N=2065 12 63 21 040 Region Center, N=276 51 34 12 03 N=1632 21 1 78 1 00 South, N=198 32 91 130 N=704 87 1 12 0 Personal savings Extended family resources or spouse funds Loan from a commercial bank or other nancial institution Relatives Other Friends Remittances State programs 2. Main Reasons to Engage in Business (See Figure 5.11) The main reason to engage in business activity was shown to be the desire to increase personal or family income, with 64 percent of business owners declaring that this was the main motivation to set up the business. This reason largely motivates both women and men., However, 14 percentage points more men than women report that the desire to increase income is their primary motivator. A majority of women (52 percent) of the women reported that they started entrepreneurial activity to increase income, while an additional 19 percent reported that a business opportunity served as the main motivation to engage in business. It stands out that more women in the center of the country (38 percent) than in any other geographical region mentioned that lack of employment motivated them to start their business. In contrast, very few men indicated lack of employment as a reason to engage in entrepreneurial activity. Looking at differences in motivations to set up a business in a given economic sector, it appears that women in retail were primarily motivated by the desire to increase income, while women in wholesale and construction had more complex rationales to start a business. In wholesale, 33 percent of women said they set up business in the area as a family tradition. In construction, 26 percent of women aimed at self-realization by starting the business. Figure 5.11: Main Reasons to Start Entrepreneurial Activity, Gender, % Female Male Total, N=2253 52 19 14 5 4 6 0 1 0 N=12114 66 22 9 21 0 10 Agriculture, N=104 50 30 0 10 0 7 03 N=791 40 33 5 6 12 30 Manufacturing, N=279 51 25 90 1 8 070 N=993 29 15 32 16 0 8 0 Retail trade, N=872 75 4 11 0 11 0 N=2883 88 12 0 Industry Wholesale trade, N=280 33 33 1 33 0 N=153 87 12 1 0 Construction, N=10 26 48 26 0 N=3220 76 24 0 Hotel or restaurant, N=185 50 49 1 0 N=744 100 0 Other services, N=523 28 18 36 0 18 0 N=3329 45 33 22 0 Micro, N=1896 55 13 15 5 5 60 1 0 N=9822 69 18 9 21 0 10 Small, N=326 40 51 31 050 1 N=2102 Size 50 37 12 0 0 Medium, N=30 15 38 31 0 8 9 0 N=189 43 51 50 10 Chisinau, N=1255 42 17 25 8 80 1 0 N=7435 63 21 13 30 North, N=508 77 20 0 10 10 1 Region N=2093 71 24 2 040 Center, N=291 43 19 0 38 0 N=1873 68 21 505 1 0 South, N=198 73 20 2 0 12030 N=712 77 23 0 Desire to increase personal/family income Discontent with previous job Business opportunity Lack of employment Self-realization More exible working hours Family tradition Other Supporting Women’s Entrepreneurship in Moldova 53 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 53 16-Mar-18 10:22:55 AM 3. Incidence of Managerial Activity among Business Owners The vast majority of male business owners tend to be top managers (Figure 5.12). Although 65 percent of female owners are top -managers, significantly less female owners are top- managers than male owners (x2 (1) = 4464.39, p = .00). Less than 63 percent of women in agriculture, manufacturing, retail and wholesale than in other economic sectors lead the company they own. The proportion of female owners who also were top- managers is lowest in wholesale, where just 30 percent were top- managers. In addition, in female-owned business, it appears that women in small and medium companies are less likely to be top- managers than in micro-sized establishments (86 percent in micro, 50 percent in medium, and 27 percent in small). There also is some geographical variation in the incidence of managerial activity of female entrepreneurs. For instance, 57 percent of female owners in Chisinau are top- managers, while in other regions of the country, such as in the North (71 percent) and in the Center (80 percent) women who own businesses are also top- managers of the firms . Figure 5.12.”Are you the Top Manager of the firm?”, gender, % Female Male Total, N=7305 65 35N=12881 99 1 Agriculture, N=543 42 58 N=856 96 4 Manufacturing, N=792 63 37 N=1160 96 4 Retail trade, N=2546 47 53 N=2999 100 0 Industry Wholesale trade, N=693 30 70 N=174 99 1 Construction, N=121 100 0 N=3341 97 3 Hotel/ restaurant, N=187 100 0 N=744 100 0 Other services, N=2424 96 4 N=3607 100 0 Micro, N=4566 86 14 N=10281 100 0 Small, N=2406 27 73 N=2242 93 7 Size Medium, N=332 50 50 N=358 94 6 Chisinau, N=4395 57 43 N=7982 100 0 North, N=763 71 29 N=2181 98 2 Region Center, N=1723 80 20 N=1973 94 6 South, N=424 77 23 N=745 97 3 Yes No 4. Demographical Characteristics of Business Owners The average age of business owners differs significantly between genders, with female business owners tending to be younger than male business owners (u=39104922.5, p=.00) (Figure 5.13). The average age for women in business is 41 years and the average age of men in business is 43 years. There are some geographical differences in relation to the age of male and female owners. Thus, in the north of the country, the average age of female owners is 59 years, while the average age of men in business is 34. In the south of the country, the situation is reversed – the average age of male entrepreneurs is 58, while the average age of women in business is 41. In the center of the country, the situation is similar, with the average age of men being 52, and of women, 36. Female business owners are youngest in the center of the country, in the retail trade industry, and in other services. In addition, the average age of female owners tends to decrease with the size of the company., tThus, older women own smaller companies, and younger women tend to be involved with medium- sized businesses. 54 Moldavija INDD Final.indd 54 16-Mar-18 10:22:55 AM Figure 5.13: Average Age of Entrepreneurs, Gender, Years Women Men Total, N=7302 41 N=12881 43 Agriculture, N=540 46 N=856 50 Manufacturing, N=792 45 N=1160 44 Retail trade, N=2546 36 N=2999 37 Industry Wholesale trade, N=693 45 N=174 42 Construction, N=121 51 N=3341 42 Hotel or restaurant, N=187 48 N=744 56 Other services, N=2424 40 N=3607 46 Micro, N=4566 43 N=10281 41 Small, N=2403 35 N=2242 54 Size Medium, N=332 45 N=358 45 Chisinau, N=4395 39 N=7982 42 North, N=763 59 N=2181 34 Region Center, N=1720 36 N=1973 52 South, N=424 41 N=745 58 A large majority of business owners (86 percent) have received higher education (Figure 5.14). Most entrepreneurs who did not get a degree of higher education obtained a high school diploma or a vocational degree (14 percent). At 88 percent, the rate of higher education among female entrepreneurs is 4 percentage points higher than for male entrepreneurs. While 100 percent of female entrepreneurs from the capital hold a university degree, less women in business from the provinces of Moldova hold a similar degree. The least number of female business owners with higher education degrees are located in the north of the country (43 percent). The presence of higher education varies with the size of the firm. Thus, fewer women with a higher education degree operate micro companies (84 percent), while 90 percent of female owners of medium enterprises have higher education degrees. Figure 5.14: Education Level of Entrepreneurs, Gender, % Women Men Total, N=7305 12 88 N=12881 1 15 84 Agriculture, N=543 40 60 N=856 8 20 72 Manufacturing, N=792 13 87 N=1160 0 10 89 Retail trade, N=2546 22 78 N=2999 03 97 Industry Wholesale trade, N=693 0 100 N=174 0 100 Construction, N=121 0 100 N=3341 0 24 76 Hotel or restaurant, N=187 0 100 N=744 0 100 0 Other services, N=2424 0 100 N=3607 0 100 Micro, N=4566 16 84 N=10281 1 18 81 Small, N=2406 6 94 N=2242 01 99 Size Medium, N=332 10 90 N=358 06 94 Chisinau, N=4395 1 100 N=7982 0 21 79 North, N=763 57 43 N=2181 34 93 Region Center, N=1723 21 79 N=1973 0 10 91 South, N=424 18 83 N=745 0 1 98 Primary school or less Secondary school High school or Vocational school University Degree or Higher Don't know The survey shows that 88 percent of business owners are married (Figure 5.15). The proportion of married men in business is 8 percentage points higher than that of women. The proportion of divorced women entrepreneurs (3 percent) is slightly larger than that of divorced men in business (1 percent). The lowest proportion of married female entrepreneurs is in other services. In this economic sector, 62 percent of women are married, and 35 percent are single and never married. In other services but wholesale, construction and the agriculture industry the proportion of single women who never married (37 percent) and divorced women is larger than for other industries. Supporting Women’s Entrepreneurship in Moldova 55 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 55 16-Mar-18 10:22:55 AM Figure 5.15: Marital Status of Entrepreneurs, Gender, % Women Men Total, N=7305 83 13 31 N=12881 91 306 1 Agriculture, N=543 84 62 8 N=856 82 18 01 Manufacturing, N=792 88 5 2 5 N=1160 93 06 2 Retail trade, N=2546 100 N=2999 100 0 Industry Wholesale trade, N=693 87 13 N=174 100 0 Construction, N=121 85 15 N=3341 78 0 22 Hotel or restaurant, N=187 99 1 N=744 100 0 Other services, N=2424 62 35 4 N=3607 93 430 Micro, N=4566 77 19 4 N=10281 90 2107 Small, N=2406 97 0 12 N=2242 95 03 2 Size Medium, N=332 72 15 5 8 N=358 88 12 0 Chisinau, N=4395 75 20 5 N=7982 87 20 10 1 North, N=763 88 4 8 N=2181 97 30 Region Center, N=1723 99 1 N=1973 95 50 South, N=424 98 2 1 N=745 99 0 2 Married Single, never married Divorced Widow(er) Don't know With respect to children, 78 percent of entrepreneurs have children, including 70 percent of women in business have children and 82 percent of male entrepreneurs (Figure 5.16. This difference is statistically significant (x2 (1)=455.2, p = .00). Among female entrepreneurs, the greatest number of childless women work in the wholesale trade (100 percent), while from a geographical perspective, a large number of childless women in business (52 percent) are located in the capital. Figure 5.16: Incidence of Entrepreneurs having Children, “Do you have children?”, Gender, % Women Men Total, N=7305 70 30 N=12881 82 17 1 Agriculture, N=543 95 6 N=856 97 30 Manufacturing, N=792 92 8 N=1160 92 26 Retail trade, N=2546 56 44 N=2999 57 43 0 Industry Wholesale trade, N=693 100 0 N=174 99 0 1 Construction, N=121 85 15 N=3341 78 22 0 Hotel or restaurant, N=187 99 1 N=744 100 0 Other services, N=2424 62 39 N=3607 96 40 Micro, N=4566 81 19 N=10281 79 21 0 Small, N=2406 48 52 Size N=2242 97 03 Medium, N=332 79 21 N=358 87 12 1 Chisinau, N=4395 52 48 N=7982 88 11 1 North, N=763 97 3 N=2181 39 Region 61 0 Center, N=1723 98 2 N=1973 100 0 South, N=424 99 1 N=745 98 2 0 Yes No Don't know The average age of the youngest child of both male and female entrepreneurs is 16 (Figure 5.17). Women in business from the center region have younger children, and the mean age of the youngest child of this category of women is eight years. Women from the north of the country have the most grown- up children, with the age of the youngest child for this latter category averaging 32. In addition, female owners of micro-sized and medium-sized businesses have younger children than women who own small companies. The average age of the youngest child of women who own micro companies is 12, and is 19 for women in medium-sized companies, while the age of the youngest child of women who own small companies is 22. 56 Moldavija INDD Final.indd 56 16-Mar-18 10:22:55 AM Figure 5.17: Average Age of Youngest Child, Gender, Years Women Men Total, N=5029 15 N=10479 17 Agriculture, N=507 20 N=830 19 Manufacturing, N=729 18 N=970 12 Retail trade, N=1323 18 N=1712 12 Industry Wholesale trade, N=693 17 N=173 8 Construction, N=102 22 N=2595 15 Hotel or restaurant, N=185 20 N=744 28 Other services, N=1490 7 N=3456 20 Micro, N=3609 12 N=8001 15 Small, N=1161 22 Size N=2166 23 Medium, N=259 19 N=312 16 Chisinau, N=2176 15 N=6920 15 North, N=742 32 N=853 18 Region Center, N=1692 8 N=1973 20 South, N=419 14 N=732 29 Entrepreneurs that have children under 12 years of age prefer to place children in organized facilities (Figure 5.18). This method of childcare is used most often by both female and male entrepreneurs. However women tend to use them more, so that 78 percent of time spent by children under age 12 of these women is in organized facilities. The second most used method of childcare during working hours for female entrepreneurs is utilizing the care of the other parent (children spend about 16 percent of their time with the other parent during their mother’s working time). Children of male entrepreneurs under age 12 also spend also 23 percent of time during their father’s working time in the care of the other parent. However, children of male entrepreneurs under age 12 tend to spend 20 percent of their time with another relative, while children of female entrepreneurs tend to spend 2 percent of their time in such arrangements. In addition, female entrepreneurs use childcare services of outside institutions more often than do male entrepreneurs. Children of female entrepreneurs spend 4 percent of their mothers working time under non-relative care. Women in other services but retail, and in the hotel/restaurant industry, tend to place their children into organized facilities for longer periods of time than women in agriculture and manufacturing. Children of mothers who own businesses that provide services other than retail, construction, and the hotel/restaurant industry spend about 92 percent of their time in facilities. The rest of time is mostly spent with the other parent. Although, children of mothers who own shares in manufacturing spend about a third of the time when their mothers are working in non-relative care. From a regional perspective it appears that female entrepreneurs from the center and south of the country place their children in organized facilities during most of their working time. In the capital, children under age 12 of female entrepreneurs spend about a third of the time when their mothers are working with their fathers, while in the North they spend up to 46 percent of the time when their mothers are working with their fathers. Figure 5.18: Childcare Arrangements for Children under 12, Gender, % Women Men Total, N=2571 78 16 240 N=4648 56 23 20 0 1 Agriculture, N=133 58 41 0 1 N=322 56 44 0 Manufacturing, N=323 49 18 3 30 1 N=633 53 36 21 8 Retail trade, N=524 76 23 00 N=1122 46 45 90 Industry Wholesale trade, N=205 69 23 80 N=117 35 41 24 0 Construction, N=0 0 N=1618 94 330 Hotel or restaurant, N=92 60 20 20 0 N=0 0 Other services, N=1294 92 80 N=836 0 11 89 0 Micro, N=2258 81 13 240 N=3961 51 24 23 0 1 Small, N=236 66 32 0 11 Size N=562 89 10 00 1 Medium, N=77 49 28 16 7 0 N=126 44 50 60 Chisinau, N=1014 64 21 5 10 0 N=3552 51 23 25 0 North, N=54 52 46 20 N=330 42 42 0 16 Region Center, N=1233 90 10 0 N=693 84 11 41 0 South, N=271 86 14 10 N=74 77 23 0 Organized facilities Other parent Other relatives Non-realtive care Other Supporting Women’s Entrepreneurship in Moldova 57 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 57 16-Mar-18 10:22:56 AM CHAPTER 6: BUSINESS DEVELOPMENT This chapter examines aspects pertaining to growth objectives for businesses in Moldova. The primary development objectives are described for both female-owned and male-owned companies. In addition, prioritized areas of development are examined. Finally, data is presented regarding, new products and services that have either been introduced or modified. A. Development and Growth The primary development goal for most companies is to grow the business, and in 2016, 60 percent of all company representatives claimed that growth was one of the main goals (Figure 6.1). The second most often invoked goal was to survive, with 34 percent of companies reporting this goal as a priority during the last year. Looking at differences between female-owned and male- owned companies it can be noted that growth constituted an objective for 63 percent of male- owned companies while 16 percentage points fewer female-owned company representatives declared it as an objective. In 2016, female-owned company representatives declared that survival was a priority more often than male-owned company representatives. Follow-up chi-square tests revealed that the difference is statistically significant (x2 (1) =546, p = .00). Thus, female-owned companies are struggling to survive more than male-owned companies. Analyzing differences between female-owned companies, it appears that businesses in manufacturing invoked growth more often (78 percent) than agribusinesses, businesses in retail, wholesale, other services but construction, and the hotel/restaurant industry. Female-owned companies in retail and wholesale claimed on a larger scale that they struggled to survive in 2016, with 51 percent of female-owned retail businesses and 75 percent of wholesale businesses declaring that their goal was to survive. Female-owned companies in these two industries also declared more often than male-owned equivalents and female-owned companies in other sectors that their goal was to improve personal or household income. In addition, more medium-sized female-owned companies set growth as a priority in 2016, than did small- and micro-sized companies. The difference is quite large, as 69 percent of medium companies mentioned growth as an objective, and just 44 percent of micro companies and 50 percent of small companies asserted that objective. Figure 6.1: Main Development Goals, Type of Company, % Fem ale -owned companies Male -owned companies Total, N=4281 47 49 8 15 8 N=15905 63 30 12 18 2 Agriculture, N=308 68 30 6 64 N=1091 59 28 17 16 4 Manufacturing, N=528 78 22 23 6 7 N=1423 66 23 014 12 Retail trade, N=1357 42 51 14 21 14 N=4188 69 31 0 Industry Wholesale trade, N=773 13 75 1 25 0 N=94 79 0 21 Construction, N=211 54 46 0 1 0 N=3251 75 24 23 0 Hotel or restaurant, N=187 52 49 1 0 N=744 0 100 0 Other services, N=916 54 46 1010 0 N=5114 61 39 32 32 Micro, N=2962 44 49 10 20 11 N=11885 57 36 16 22 2 Small, N=1160 50 51 1 0 2 Size N=3488 82 13060 Medium, N=158 69 28 11 12 5 N=532 78 7 5 22 7 Chisinau, N=2628 58 43 12 11 12 N=9749 65 25 9 28 2 North, N=631 20 78 2 11 N=2313 13 83 61 Region Center, N=775 38 34 0 41 0 N=2921 87 9 30 41 South, N=247 21 81 233 N=921 93 614 To grow To survive To provide a living for family To improve personal /household/ family income To prepare for selling Other Don't know 58 Moldavija INDD Final.indd 58 16-Mar-18 10:22:56 AM From a geographical perspective it appears that survival was an important development goal for companies in the North and South (Figure 6.2). In these regions, over 78 percent of companies claimed survival was an objective. In the capital and the center of the country the situation appears different. In Chisinau, 58 percent of business representatives declared growth was an important objective, while in the Center, 38 percent claimed growth was an objective, and 41 percent said their development goal was to improve personal or household income. Business growth was mostly oriented towards increase of sales turnover and profits. Of respondents who mentioned growth as an objective, 68 percent said that their goal with related to increasing sales. In the meantime, 59 percent mentioned that the company followed growth of profits and about a third were concerned with labor. Female-owned companies were more concerned with increasing sales (x2 (1) = 52.6, p = .00) and profits (x2 (1) = 100.9, p = .00) than male-owned companies. Female-owned companies were also more eager to increase the number of assets than male-owned companies (x2 (1) = 17.2, p = .00). Male-owned companies were more likely to say that labor was a direction of growth (x2 (1) = 181.0, p = .00). Among female-owned companies it stands out that most manufacturing companies (97 percent), construction firms (98 percent), businesses in the hotel/restaurant industry (96 percent), and all firms in wholesale aimed at increasing sales in 2016. Meanwhile female-owned businesses in wholesale, construction, and the hotel/restaurant industry were more concerned with increasing profits. In contrast with companies from other economic sectors, firms in agribusinesses, and firms in manufacturing and services other than retail, wholesale, construction and the hotel/restaurant industry, were more concerned with increasing the number of assets and 39 percent to 96 percent of female-owned companies in these industries mentioned seeking to maximize the number of assets. In addition, it appears, that more companies from the North (33 percent) and the South (50 percent) sought to increase the number of assets owned by the company. Interestingly, data show that in contrast with smaller companies, 48 percent of medium-sized firms set growth of employment as a growth objective in 2016. To compare the proportions, just 9 percent of small companies and 23 percent of micro-sized companies claimed the same. From a geographical point of view, more companies concerned with increasing employment were located in the center (41 percent) and the south (30 percent) of the country. Figure 6.2: Orientation of Growth, Type of Company, % Female - owned companies Male - owned companies Total, N=1997 77 62 20261 N=10086 66 58 28 23 7 Agriculture, N=209 77 68 16 39 4 N=647 79 50 35 15 Manufacturing, N=411 97 47 16 35 1 N=935 48 50 18 26 Retail trade, N=568 50 83 17 N=2870 83 70 1 40 Industry Wholesale trade, N=100 100 3 5 N=74 50 100 50 250 Construction, N=113 98 92 6 N=2423 38 2 62 1 Hotel or restaurant, N=96 96 98 96 96 N=0 0 Other services, N=499 78 43 21 38 N=3136 76 49 76 24 24 Micro, N=1309 68 71 2324 N=6802 53 58 11 37 13 Small, N=578 96 38 9 301 N=2870 96 57 6 44 Size Medium, N=110 81 72 48 302 N=414 84 73 35 39 Chisinau, N=1522 80 63 1727 N=6374 60 72 27 33 12 North, N=128 83 66 9 33 6 N=299 77 33 34 28 0 Region Center, N=295 61 52 41 13 N=2553 95 20 39 5 South, N=51 85 68 30 50 N=859 28 77 3 3 Sales turnover Pro ts Employment Assets Other Don’t know Supporting Women’s Entrepreneurship in Moldova 59 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 59 16-Mar-18 10:22:56 AM B. Changes to Product and Service Lines In 2016, 51 percent of companies introduced at least one new product or service, 25 percent modified products or services, and 43 percent did not introduce new products or new services (Figure 6.3). Female-owned enterprises introduced less products than male-owned companies (x2 (1) = 1049.3, p = .00). tThis effect is present even considering variations produced by size of company, location, and industry. All other things being equal, female-owned companies were 2.8 times more likely than male-owned enterprises to incur no changes to the product/service line. It appears that female-owned companies from the capital were more likely to introduce or modify products or services in 2016. In Chisinau, 37 percent of female-owned firms declared introducing at least one product or service, and 29 percent modified at least one product or service. In other regions of the country, more than 77 percent of companies incurred no changes to the product or service lines. In addition, there are important differences between female-owned and male-owned companies in the center of the country. While 88 percent of male- owned companies in the region introduced at least one new product or service, and 46 percent modified products or services, just 23 percent of female-owned companies incurred changes to the product or service line. Figure 6.3: Changes of the Product/Service Line in 2016, Type of Company, % Fem ale -owned companies Male -owned companies Total, N=4281 63 29 19 0 N=15905 38 57 0 25 1 Agriculture, N=308 59 40 90 N=1091 47 47 17 0 Manufacturing, N=528 46 46 20 0 N=1423 43 52 13 0 Retail trade, N=1357 65 35 70 N=4188 34 66 27 0 Industry Wholesale trade, N=773 100 0 N=94 21 79 20 0 Construction, N=211 92 81 0 N=3251 26 75 0 Hotel or restaurant, N=187 49 51 1 0 N=744 0 100 100 0 Other services, N=916 36 32 63 0 N=5114 50 35 32 3 0 Micro, N=2962 68 22 18 0 N=11885 43 50 28 1 0 Small, N=1160 55 44 20 0 N=3488 18 80 12 0 Size Medium, N=158 35 64 25 0 N=532 39 61 37 0 Chisinau, N=2628 51 37 29 0 N=9749 35 57 25 2 0 North, N=631 87 11 50 N=2313 82 15 60 Region Center, N=775 77 23 2 0 N=2921 12 88 46 0 South, N=247 85 14 60 N=921 39 61 0 3 No changes Introduced at least 1 new product/service Modi ed at least 1 product/service Other Don't know C. Motivations to Improve the Way of Doing Business Customer feedback appears to be the greatest motivation for firms in the conduct of their businesses, with 44 percent of female-owned businesses and 46 percent of male-owned firms saying that customer feedback is the most important motivation to conduct business (Figure 6.4). An important difference between female-owned and male-owned companies is that the management of 31 percent of female-owned businesses is motivated by rival firms to conduct business better, while for male-owned enterprises the parent firm and the Internet seem to be the second and third most often invoked main motivation to improve business. Of male-owned companies, 20 percent claimed that the parent firm provides a motivation to improve, while 6 percent of female-owned companies said the same. The data also shows that 17 percent of male-owned companies and 5 percent of female-owned companies said that the Internet is the primary motivation. 60 Moldavija INDD Final.indd 60 16-Mar-18 10:22:56 AM Figure 6.4: Primary Motivation to Improve Business, Type of Company, % Fem ale -owned companies Male -owned companies Total, N=4281 44 31 8 6 5 21 0 N=15905 46 4 6 20 17 5 2 1 0 Agriculture, N=308 18 22 6 34 10 05 5 0 N=1091 26 13 215 9 0 17 9 Manufacturing, N=528 50 11 21 10 1 1 6 00 N=1423 44 6 6 17 20 0 8 0 Retail trade, N=1357 42 51 70 0 N=4188 48 9 0 43 0 0 Industry Wholesale trade, N=773 51 12 12 13 12 0 N=94 39 21 20 20 0 0 Construction, N=211 5 91 0210 N=3251 48 1 23 27 20 Hotel or restaurant, N=187 100 0 N=744 100 0 0 Other services, N=916 43 26 0 10 10 0 0 N=5114 41 1 0 44 15 0 Micro, N=2962 36 35 10 5 7 31 0 N=11885 46 1 6 17 21 6 101 Small, N=1160 66 23 171 00 N=3488 Size 1 1 49 12 2 28 5 030 Medium, N=158 29 22 4 30 50 7 1 0 N=532 32 18 14 25 8 030 Chisinau, N=2628 52 16 11 5 8 41 0 N=9749 56 0 9 2 25 8 10 North, N=631 22 63 3 9 31 00 N=2313 24 31 65 3040 Region Center, N=775 44 43 1 8 031 0 N=2921 42 14 1 31 50 503 South, N=247 10 76 1 9 1 130 0 N=921 17 17 3 61 1 0 Customer feedback Rival rms Suppliers Parent rm Internet Professional journals and trade publications Business associations and conferences or exhibits Government ministries or programs Consultancy rms Universities and research institutes Don't know CHAPTER 7: BUSINESS ACTIVITY This chapter presents information pertaining to national and foreign sales, as well as labor productivity, in different types of companies. The chapter then provides information regarding the markets on which companies operate, and examines the perceived level of competition with the informal sector. In addition, data in relation to origin of supplies and financial aspects of the company are presented. The chapter also examines possession and ownership of building and land plots occupied by companies. It chapter concludes with information about use of information technologies (IT) by companies. A. Sales and Labor Productivity This section describes data in relation to the amount of sales generated by companies in 2016 as well as 2014. Labor productivity is presented for both female-owned and male- owned enterprises in order to assess whether there are significant differences between the outputs of female-owned versus male-owned firms. The share of national sales is contrasted with the share of foreign sales. Results of disaggregated analysis is presented to observe whether there are differences between female-owned and male-owned companies, as well to identify any differences between companies of different sizes, sectors, and geographic positions. Foreign sales of companies were analyzed in order to reveal what are the respective shares of direct and indirect exports. 1. Sales The average sales of female-owned SME’s in 2016 was 3,618,719 MDL. Enterprise size is a good predictor of sales turnover. Thus, larger enterprises registered larger sales. Differences in the turnover of companies from different regions of the country were registered (F(3,18599)=2.65, p=.04). Post-hoc analysis revealed that enterprises from the capital registered turnovers significantly greater than companies from all south (mean differences=905819.7, p’s =.02.00). There were no significant differences between the turnovers of companies from provincial regions. There were significant differences between the turnovers of female-owned and male- owned companies (u=22259368.5, p=.00). In this sense, female-owned companies have registered turnovers (3618719 MDL) significantly higher than male-owned companies (3175575MDL). Figure 7.1 displays the mean value of sales of enterprises, while Appendix A.1 details median values as well as the sales registered by companies in the lower and upper quartile. Supporting Women’s Entrepreneurship in Moldova 61 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 61 16-Mar-18 10:22:56 AM Figure 7.1: Average Sales in 2016, Type of Company, MDL Female - owned companies Male - owned companies Total, N=3597 3618719 N=15006 3175575 Agriculture, N=299 7132553 N=1044 4995293 Manufacturing, N=424 3359130 N=1409 5778126 Retail trade, N=1169 1884348 N=4170 2800558 Industry Wholesale trade, N=674 5985489 N=37 200000000 Construction, N=209 5109553 N=2508 2539387 Hotel or restaurant, N=185 6094014 N=744 720000 Other services, N=637 1611260 N=5096 1630563 Micro, N=2507 1240466 N=11142 985427 Small, N=949 6794061 N=3457 Size 4325063 Medium, N=141 24520667 N=408 53229180 Chisinau, N=2055 3892493 N=8917 3105803 North, N=622 3994867 N=2267 2608142 Region Center, N=675 2957091 N=2901 3354990 South, N=244 2186398 N=921 4682258 The figures show that 69 percent of companies declared growth of sales in 2016 in contrast with 2014. However, male-owned companies declared growth of sales at a rate 3.9 times greater than female-owned companies. About percent of companies had at least doubled their sales. The number of female-owned companies that had at least doubled their revenue is 10 percent, while among male-owned companies just 2.4 percent had experienced the same growth. Table 7.1 summarizes the median value of sales in 2016 as a percentage value of the amount of sales in 2014. It is noticeable that micro- and medium-sized companies increased their sales the most, registering an average growth of 120 percent. Male-owned medium companies had larger growth larger (120 percent) than female-owned medium companies (118 percent). Among female- owned companies small-sized enterprises registered growth larger than micro- and medium- sized enterprises (p’s =.00). Thus, while female-owned small companies had an average growth of 123 percent from 2014 to 2016, micro companies had similar turnovers (100 percent) and medium companies had increased the turnover in 2016 to represent 118 percent of the turnover in 2014. Industry-wise it appears that female-owned hotel or restaurant businesses had decreased turnovers in 2016 compared with 2014. Thus, the 2016 sales of female- owned retail businesses represented 74 percent of their sales in 2014. This stands in stark contrast with stability of sales male-owned retail businesses had registered in 2016 compared with 2014 (100 percent). Female-owned companies in agriculture and retail incurred growth of sales in 2016 compared to 2014 larger than other industries. Thus, female-owned retail and agribusinesses had sales in 2016 that represented 120 percent of sales in 2014. The ANOVA analysis showed that from a regional perspective companies in the south of the country had registered the lowest sales in 2016 as compared to 2014. The difference is significant in comparison to all other regions of Moldova (F(3,15015)=8.02, p=.00). Table 7.1: 2016 Sales as Percent of 2014 Sales, Type of Company, % Total Female-owned Male-owned Lower Upper Lower Upper Lower Upper Median Median Median Quartile Quartile Quartile Quartile Quartile Quartile Total, N=20186 114 83 133 100 67 123 114 86 133 Industry Agriculture, N=1399 133 100 175 120 100 200 133 71 143 Manufacturing, N= 1951 120 71 143 100 120 187 120 100 133 Retail trade, N= 5082 120 100 133 120 46 111 120 111 133 Wholesale trade, N= 893 120 100 123 111 100 123 122 3 86 Construction, N=3784 86 3 86 100 21 500 86 114 114 Hotel or restaurant, N= 863 114 114 114 74 90 100 114 67 148 Other services, N= 6034 100 67 148 100 67 100 120 67 148 Size Micro, N= 14819 120 67 133 100 67 120 120 67 133 Small, N= 3722 100 86 123 123 90 123 100 86 109 Medium, N= 1459 120 106 155 118 100 133 120 107 155 Region Chisinau, N= 12377 100 67 120 110 100 123 100 67 120 North, N = 2853 133 107 133 46 46 90 133 133 133 Center, N= 3601 91 86 111 111 100 175 86 86 109 South, N= 1169 121 115 133 67 67 95 121 121 133 62 Moldavija INDD Final.indd 62 16-Mar-18 10:22:57 AM Sales of Moldovan firms are 95 percent national, 3 percent indirect exports, and 2 percent direct exports. Male-owned and female-owned companies differ in the amount of all types of sales (Figure 7.2). Thus, male-owned companies have significantly greater national sales (96 percent of sales are national sales), than female-owned companies (88 percent are national sales). The latter difference is statistically significant (u=33005483.5, p=.00). Although the mean proportion of indirect exports is similar for female-owned and male-owned companies (3 percent%), nonparametric tests show that female-owned companies export indirectly more than male-owned companies (u= 32604481.5, p=.00). Female-owned companies also export directly more than male-owned companies. While the mean size of direct exports of female-owned companies is 6 percent%, it is 1 percent for male-owned companies, the difference being statistically significant (u=33324139.0, p=.00). There are differences between industries when it comes to the size of indirect exports of female-owned companies (F(2,20172)=405.1, p=.00). Female-owned agribusinesses export indirectly more than other industries (mean differences >5.09, p’s<.00). The mean proportion of indirect exports for female-owned agribusinesses is 29 percent, but it is under 4 percent for other industries. In addition, female-owned manufacturing businesses exported indirectly more than service providers (mean differences >7.5, p’s < .00),. with 4 percent of the sales of female-owned enterprises in manufacturing representing indirect exports, while service providers did not export indirectly in 2016. There are also differences between industries regarding the size of direct exports of female-owned companies (F(2,.20176.)=448.2, p=.00).Female-owned companies in agriculture, manufacturing other services but retail, wholesale, construction and the hotel/restaurant industry have more direct exports. directly more. With 25 percent of sales being direct exports in 2016, female-owned manufacturing businesses exported directly significantly more than any other industry (mean differences >8.09, p’s < .00).The volume of direct exports is 10 percent for other services but retail, wholesale, construction, and the hotel/restaurant industry. The latter is significantly larger than the volume of direct exports for manufacture, , wholesale, construction, and the hotel/restaurant industry (mean differences >1.58, p’s < .00). Of the annual sales of female-owned companies in agriculture in 2016, 6 percent were direct exports. Figure 7.2: Type of Sales in 2016, Type of Company, % Female - owned companies Male - owned companies Total, N=4275 89 36 N=15905 96 31 Agriculture, N=302 63 29 6 N=1091 88 11 1 Manufacturing, N=528 54 4 25 N=1423 83 12 5 Retail trade, N=1357 100 0 N=4188 99 01 Industry Wholesale trade, N=773 100 0 N=94 100 0 Construction, N=211 100 0 N=3251 100 0 Hotel or restaurant, N=187 100 0 N=744 100 0 Other services, N=916 90 010 N=5114 97 30 Micro, N=2956 92 14 N=11885 97 30 Small, N=1160 86 59 Size N=3488 98 2 1 Medium, N=158 72 15 13 N=532 79 8 13 Chisinau, N=2622 88 18 N=9749 96 31 North, N=631 88 83 N=2313 98 12 Region Center, N=775 96 22 N=2921 98 11 South, N=247 91 90 N=921 89 101 National sales Indirect exports Direct exports Female-owned companies that export, undertake the activity for about nine years. Female-owned small and medium-sized companies tend to export for longer periods – on average for 10-14 years. In addition, female-owned companies in manufacturing export for longer periods than companies in other industries (mean differences >5.17, p’s < .00). While, companies in manufacturing export on average for 13 years, agribusinesses export for seven years, and service providers for two years. Female-owned and male-owned agribusinesses usually start exporting when they have had their businesses for about seven years. into business. There was a statistically significant difference establishedshown between female-owned and male-owned agribusinesses concerning the time when they started export activities (u=12085.5, p=.006). In manufacturing, female-owned companies start exporting later than male- owned companies (u=11033.5, p=.00). Thus, female-owned companies in manufacturing start exporting when they have been active for about 13 years, while male- owned manufacturing businesses start exporting about four years after they started the business. Supporting Women’s Entrepreneurship in Moldova 63 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 63 16-Mar-18 10:22:57 AM 2. Labor Productivity In 2016, the average labor productivity1 of SME’s in Moldova was 163MDL/hour (Table 7.2). Female-owned and male-owned companies differ significantly in the amount of labor productivity (u=24448098, p=.00). Female-owned companies had a labor productivity of 172 MDL/hour, while male-owned companies had a labor-productivity of 161 MDL/hour Among female-owned companies, there are industry differences in labor productivity (F(6,3584)=176,2, p=.00). The wholesale industry had the greatest labor productivity (421 MDL/hour), followed by other services (264 MDL/hour), and the third most profitable sector was hotel/ restaurant (133 MDL/hour). The industries with the lowest labor productivity were services other than retail, wholesale, other services, and the hotel/restaurant industry (retail (105 MDL/hour) and construction (61 MDL/hour). Small female-owned companies have an average labor productivity larger than that of micro- and medium-sized companies (mean differences >61.71, p’s < .00). Thus, while labor productivity of small companies averages at 218 MDL/hour, labor productivity of micro- sized companies is 157 MDL/hour, and it is 141 MDL/hour for medium-sized companies. The phenomenon is not observable among male- owned companies of similar sizes. In the case of male-owned companies labor productivity is lowest among small companies and largest among medium companies. Female-owned companies in the capital have the largest labor productivity (235 MDL/hour). Thus, female-owned enterprises in Chisinau have significantly higher labor productivity than companies in other regions of Moldova (mean differences >129, p’s < .00). Following the capital region level of productivity is the center region where companies output on average 105 MDL/hour, significantly more than in the south of the country (mean differences >22.9, p’s < .005). 64 Moldavija INDD Final.indd 64 16-Mar-18 10:22:57 AM Table 3. Labor productivity, type of company, MDL/hour Moldavija INDD Final.indd 65 Total Female-owned Male-owned Lower Upper Lower Upper Lower Upper Mean Median Mean Median Mean Median Quartile Quartile Quartile Quartile Quartile Quartile Total, N=18597 163 90 29 129 172 75 38 200 161 90 27 107 Agriculture, N=1337 113 69 50 135 145 95 43 167 105 63 50 129 Manufacturing, N=1833 121 63 32 179 81 50 32 63 133 108 38 203 Retail trade, N=5339 A Review, Assessment, and Recommendations 105 50 46 167 117 46 25 167 102 100 50 100 Industry Wholesale trade, N=711 421 333 112 333 382 333 112 333 1132 1132 1087 1176 Construction, N=2716 61 45 3 94 92 107 34 125 59 45 3 94 Supporting Women’s Entrepreneurship in Moldova Hotel or restaurant, N=928 133 90 90 90 307 500 107 500 90 90 90 90 Other services, N=5732 264 106 21 165 112 43 20 88 283 106 21 165 Micro, N=13642 165 50 21 112 157 63 38 167 166 50 21 107 Size Small, N=4406 149 100 94 182 218 150 34 333 130 100 94 100 Medium, N=549 245 130 47 363 141 105 31 217 281 147 58 368 Chisinau, N=10967 210 100 25 165 235 112 43 333 204 100 20 107 North, N=2889 63 50 46 50 83 46 46 107 58 50 50 50 Region Center, N=3577 105 94 21 100 105 34 17 175 105 94 21 94 South, N=1165 154 170 81 170 59 20 20 24 179 170 170 182 1 Labor productivity was calculated by dividing annual sales by the estimated total man hours in 2016 (2000 working hours multiplied by the number of full-time personnel). 65 16-Mar-18 10:22:57 AM 3. Main Market and Competition In this section, data is presented with reference to the main market (local, national, or international). In addition, the degree of competition perceived by companies on the local and national levels is assessed. (a) Main Market The main two markets for the vast majority of companies are the local and national markets (Figure 7.3), with 92 percent of female-owned companies reported selling their main product on the local or national markets. The remaining 8 percent have sold their main product abroad. There are some industry-based differences in the presence of the main products on given markets. For instance, companies in agriculture, manufacturing, construction, and wholesale sold their products and services mainly on the national market, while companies in retail, the hotel/restaurant industry, and other services but retail, wholesale, construction, and the hotel/restaurant industry sold their products and services mostly on the local market. Companies that were present internationally were mostly manufacturing enterprises and agribusinesses. There are some differences relating to size. Thus while 63 percent of micro companies sell their product locally, 64 percent to 56 percent small and medium-sized firms are presentsell nationally. In addition, medium-sized companies manage to export more (27 percent), while female-owned medium-sized companies sold their product mainly on the international market. Regionally, companies from the North of the country export the most (about 11 percent are international sales), followed by companies in the South and the capital. In addition, more companies from the capital (49 percent) and companies from the Center (43 percent) sell more products and services nationally, than companies from other regions. Figure 7.3: Main mMarket on which Companies Sold their Main Product, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 50 42 80 N=15905 50 48 3 Agriculture, N=308 9 56 33 2 N=1091 21 66 13 Manufacturing of, N=528 11 60 29 0 N=1423 37 46 17 0 Retail trade of, N=1357 72 28 0 N=4188 33 67 0 Industry Wholesale trade of, N=773 36 64 0 N=94 0 100 0 Construction of, N=211 2 98 0 N=3251 69 31 0 Hotel or restaurant, N=187 100 0 N=744 100 0 Provide services of, N=916 68 22 100 N=5114 56 44 0 Micro, N=2962 63 32 50 N=11885 61 37 0 2 Small, N=1160 22 64 14 Size N=3488 20 79 0 1 Medium, N=158 17 56 27 0 N=532 10 67 24 0 Chisinau, N=2628 42 49 90 N=9749 58 40 0 2 North, N=631 72 17 11 N=2313 27 71 2 Region Center, N=775 53 43 40 N=2921 34 65 0 2 South, N=247 74 17 100 N=921 72 15 13 Local National International Don't know (b) Competition The figures show that 32 percent of all companies compete with informal or unregistered firms (Figure 7.4). There are significant differences in the likelihood of male-owned companies and female-owned companies treporting competition with unregistered establishments (x2 (1) = 254.1, p = .00). Thus, male- owned enterprises are 1.45 times more likely than female-owned companies to report competing with informal establishments. Looking at differences between female-owned companies from different industries, it is noticeable that slightly more than a half of all female-owned companies in wholesale, and in hotel and restaurant reported competing with unregistered businesses, and 47 percent of businesses in construction reported the same. Retail least companies reported the least competition with the informal sector. Examining differences in between female-owned establishments it appears that companies in the capital report being subjected to competition at higher rates – 29 percent of companies in Chisinau reported competition with unregistered firms, while no more than 8 percent reported the same in provincial Moldova. 66 Moldavija INDD Final.indd 66 16-Mar-18 10:22:57 AM Figure 7.4: Incidence of Establishments Competing against Unregistered or Informal Firms, Type of Company, % Female - owned companies Male - owned companies Total, N=3930 27 72 1 N=15514 34 62 5 Agriculture, N=206 16 82 2 N=947 45 55 0 Manufacturing, N=375 16 80 5 N=1184 33 66 1 Retail trade, N=1354 14 86 0 N=4188 57 43 0 Industry Wholesale trade, N=773 51 49 0 N=94 20 80 0 Construction, N=211 47 51 1 N=3251 0 100 0 Hotel or restaurant, N=187 51 49 0 N=744 0 100 0 Other services, N=824 24 76 0 N=5106 39 47 15 Micro, N=2814 16 84 0 N=11638 37 56 6 Small, N=999 60 39 2 N=3469 23 Size 77 0 Medium, N=116 26 67 8 N=406 15 81 4 Chisinau, N=2399 34 65 1 N=9571 27 65 8 North, N=562 18 82 1 N=2274 80 20 0 Region Center, N=745 18 82 0 N=2867 25 75 0 South, N=224 9 92 0 N=802 14 86 0 Yes No Don't know B. Supplies In this section, information pertaining to the type of goods supplied to the company is presented. Special attention will be drawn to differences in the share of supplied goods of national and foreign origin. The share of goods supplied by household work or unregistered firms is discussed. It is also discussed whether female-owned companies use more goods supplied by unregistered firms. On average, 45 percent of material inputs and supplies used by companies in 2016 were of domestic origin, while 55 percent were foreign (Figure 7.5). There are no significant differences on using inputs of domestic origin or foreign inputs between female-owned companies and male- owned enterprises. Female-owned companies in construction and the hotel/restaurant industry tend to rely mostly on domestic material inputs, where as 85 percent of material inputs and supplies used by construction and the hotel/restaurant industry were national. Meanwhile, companies in wholesale, other services but retail, construction, and the hotel/restaurant industry used mostly material inputs and supplies of foreign origin. Just 12 percent of inputs and supplies used in 2016 by the wholesale industry were domestic, and 38 percent of the same inputs were domestic for other services but retail, wholesale, construction and the hotel/restaurant industry. Female-owned companies from different regions of the country rely on material inputs and supplies of domestic origin to a different extent (F(3,19971)=51.89, p=.00). Female- owned companies in the center of the country have up to 69 percent of inputs supplied nationally, while just about 25 percent of inputs of female-owned companies in the South are domestic. Figure 7.5: Origin of Material Inputs and Supplies, Type of Company, % Female - owned companies Male - owned companies Total, N=4090 48 52 N=15885 44 56 Agriculture, N=308 59 41 N=1091 64 36 Manufacturing, N=528 63 37 N=1423 32 68 Material Retail trade, N=1354 56 44 N=4188 30 70 inputs or Industry Wholesale trade, N=773 12 88 N=74 supplies of 36 64 domestic Construction, N=208 85 15 N=3251 45 55 origin Hotel or restaurant, N=187 85 15 N=744 100 0 Other services, N=731 38 62 N=5114 47 53 Micro, N=2774 48 52 N=11885 48 52 Material inputs or Small, N=1160 50 50 Size N=3488 34 66 supplies of Medium, N=156 46 54 N=512 41 59 foreign Chisinau, N=2440 42 58 N=9749 45 55 origin North, N=631 56 44 N=2313 39 61 Region Center, N=772 69 31 N=2901 48 52 South, N=247 25 75 N=921 45 55 Supporting Women’s Entrepreneurship in Moldova 67 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 67 16-Mar-18 10:22:57 AM Most companies declared having not used supplies sourced from unregistered firms (Figure 7.6). However, 3 percent of female-owned companies got materials or goods from unregistered firms. It appears that female-owned micro-sized companies are more likely than larger enterprises to source goods from unregistered providers – 5 percent of micro companies said they used goods from unregistered sources, including households. There are regional differences in the likelihood of using supplies from unregistered sources and 5 percent of companies in the capital declared supplying goods from such establishments, while 1 percent in the Center and none in the South and North declared the same. Female-owned service providers declared having received supplies from unregistered sources more than companies in other industries. Thus, 15 percent of companies in other services but retail, wholesale, construction, and the hotel/restaurant industry sourced materials or goods from unregistered firms or households. Figure 7.6. Material iInputs or Supplies Purchased in 2016, Provided from Unregistered Firms, Type of Company, % Female - owned companies Male - owned companies Total, N=3088 3 97 0 N=12076 2 97 1 Agriculture, N=256 0 97 3 N=614 0 100 0 Manufacturing, N=344 2 99 0 N=1116 2 83 15 Retail trade, N=972 0 100 0 N=4188 0 100 0 Industry Wholesale trade, N=680 0 100 0 N=94 0 100 0 Construction, N=118 0 100 0 N=2455 2 98 0 Hotel or restaurant, N=91 0 100 0 N=0 0 Other services, N=627 15 85 0 N=3609 4 96 0 Micro, N=1951 5 95 0 N=8216 2 96 2 Small, N=1010 1 100 0 N=3377 Size 0 100 0 Medium, N=127 0 100 0 N=484 5 92 3 Chisinau, N=1800 5 95 0 N=6623 3 95 3 North, N=597 0 100 0 N=2141 1 99 0 Region Center, N=452 1 97 2 N=2457 0 100 0 South, N=239 0 100 0 N=855 1 99 0 Yes No Don't know C. Finance This sub-chapterdiscusses a number of topics involving finance issues, and presents data regarding working capital, acquisitions, and credits. Sources of working capital are explored, and comparative data regarding reliance on external (formal versus informal) or internal sources is presented for female-owned and male-owned companies. Preferences of external sources of finance are analyzed. In addition, reliance on remittances is investigated. The incidence of acquisition of fixed assets is presented for different categories of firms. Moreover, information regarding the factors that influence acquisition of fixed assets is provided. The mean cost of acquisitions is presented for different categories of immovable property. In addition, the main source of finance for acquisitions of fixed assets is determined, and the main source of funding for each category of assets is presented along with data regarding loans. The main factors causing borrowing are analyzed, and the mean number of bonds per company that borrow in different categories are examined. In relation to borrowers, preferred types of borrowing institutions are named. In addition, requirements for collaterals and types of collaterals are examined. Moreover, the mean value of the bond is calculated, and differences in bond values awarded to different categories of companies are presented. Lastly, results of analysis referring to applications for loans in 2016 are provided. Reasons for not applying for a credit are analyzed, along with a discussion of the success of credit applications. 68 Moldavija INDD Final.indd 68 16-Mar-18 10:22:57 AM 1. Sources of Working Capital In general, 79 percent of the working capital of enterprises was funded by means of internal funds or retained earnings (Figure 7.7). About 10 percent% were purchases on credit from suppliers and advances from customers, while 9 percent of the capital was financed through loans from banks. There are significant differences between male-owned and female- owned companies in terms of reliance on internal funds. Male-owned companies relied significantly more on internal funds (u=23187710.0, p=.00), with up to 81 percent of the working capital being insured by this means in male-owned enterprises and only 69 percent in female-owned companies. On the other hand, female-owned enterprises relied significantly more on loans from banks (u=25355393,5, p=.00), 13 percent of the working capital of female-owned firms coming from loans, while 7 percent of the working capital of male-owned companies was financed with loans. Female-owned companies also relied significantly more on purchases on credit from suppliers (u=24539925.5, p=.00), than male-owned companies. Of the working capital of female-owned companies, 15 percent was financed by purchases on credit, while 9 percent of the working capital of male- owned companies was funded on credit. There are significant differences between female-owned companies from different industries in their reliance on internal funds to finance working capital (F(6,18043)=576.8, p=.00). Thus, female-owned establishments in manufacturing, construction, and the hotel/restaurant industry havehad from 82 percent to 95 percent of their working capital financed by internal funds, while companies in agriculture, retail, wholesale, and other services but manufacture, construction, and the hotel/restaurant industry fund from 57 percent to 66 percent of thetheir working capital by internal funds. Of all economic sectors, female-owned firms in the hotel or restaurant industry rely the least on internal funds, meaning that 95 percent of thetheir working capital is thus from outside financing. Female-owned companies in this sector rely significantly more on purchases on credit than companies from other economic sectors (mean differences > 5.7, p<.00). Female-owned companies in retail rely more on loans from non-bank institutions than any other economic sector (mean differences >0.9, p<.00). Meanwhile, female-owned companies in wholesale rely significantly more on loans from banks and financial institutions than female-owned companies in all other sectors (mean differences >17.0, p<.00). Thus, almost a third of the working capital of companies in wholesale is funded through loans from financial institutions. Figure 7.7: Sources of Working Capital, Type of Company, % Female - owned companies Male - owned companies Total, N=4088 69 13 2 0 15 1 N=13962 81 7 92 Agriculture, N=308 61 13 32 17 4 N=1075 59 11 23 11 14 Manufacturing, N=521 82 41 11 1 N=1170 78 9 4 81 Retail trade, N=1264 57 10 7 25 N=4188 80 15 5 Industry Wholesale trade, N=773 66 31 0 30 N=56 73 27 Construction, N=211 80 20 N=2508 63 40 31 2 Hotel or restaurant, N=187 95 05 N=744 100 Other services, N=824 75 14 12 N=4222 97 1 0 11 Micro, N=2870 68 11 3 0 17 1 N=10062 83 40 11 1 Small, N=1060 71 19 1 Size 09 N=3421 78 16 0 23 Medium, N=158 72 10 11 13 1 N=478 67 16 42 10 Chisinau, N=2437 78 14 7 N=7879 85 4010 North, N=631 44 15 40 1 Region N=2298 78 40 14 3 Center, N=775 56 12 12 19 1 N=2901 82 9116 1 South, N=246 79 10010 1 N=883 55 35 506 Internal funds or retained earnings Borrowed from banks: private and state-owned Borrowed from non-bank nancial institutions Financial support through the state programs Purchases on credit from suppliers and advances from customers Other, moneylenders, friends, relatives, etc. Supporting Women’s Entrepreneurship in Moldova 69 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 69 16-Mar-18 10:22:58 AM Female-owned companies in the capital and the south of the country rely significantly more on internal funds to finance working capital, than companies in the center and the Nnorth of the country (F(3,18046)=319.0, p=.00). Up to 78 percent of the working capital of companies in Chisinau and the South are sourced by means of internal funds. Female- owned companies in provincial Moldova use purchases on credits and advances from clients to fund the enterprise significantly more than companies in the capital (mean differences > -3.2, p<.00). This tendency is especially strong in the North, where firms rely significantly more on purchases on credit from suppliers, or on advanced payments from clients, than companies in any other region (mean differences >9.7, p<.00). Another important difference is that female-owned companies in the center of the country finance about 12 percent of the working capital through loans from non-bank institutions, which is significantly more than is financed by female-owned companies in other regions (mean differences >0.59, p<.01). Remittances were used just by a minority of firms. In the entire study of 300 firms, only 18 firms reported using remittances in order to finance business activity. Of these firms, nine were female-owned companies. For the latter group, remittances comprised up to 2 percent of the working capital. 2. Acquisition of Fixed Assets In 2016, 47 percent of companies acquired fixed assets (Figure 7.8). There are significant differences between male-owned and female-owned companies when it comes to acquisitions (x2 (1) = 857.7, p =.00). Thus, male-owned companies were 2.86 times more likely to have bought fixed assets in 2016. In fact, while 52 percent of male-owned companies declared having bought assets, just 28 percent of female-owned companies declared the same. The likelihood of female-owned companies buying assets changed based on size of the company. In this regard, small and medium- sized companies engaged more in acquisition of property. However, micro-sized companies had significantly less acquisitions, just 14 percent declaring to that they bought fixed assets in 2016. The number of companies that bought fixed assets in 2016 also changed as a function of the economic sector. Thus, 66 percent of female-owned agribusinesses bought fixed assets, while just 32 percent of female-owned companies in manufacturing, 22 percent in retail, and 22 percent in other services acquired fixed assets. Figure 7.8. Incidence of Establishments in Fiscal Year 2016, Purchasing any New or Used Fixed Assets, such as Machinery, Vehicles, Equipment, Land, or Buildings, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 28 72 0 N=15905 52 48 0 Agriculture, N=308 66 34 0 N=1091 44 56 0 Manufacturing, N=528 32 68 0 N=1423 47 54 0 Retail trade, N=1357 22 79 0 N=4188 46 54 0 Industry Wholesale trade, N=773 39 61 0 N=94 79 21 0 Construction, N=211 6 94 0 N=3251 76 24 0 Hotel or restaurant, N=187 1 99 0 N=744 0 100 0 Other services, N=916 22 78 0 N=5114 53 47 0 Micro, N=2962 14 86 0 N=11885 44 56 0 Small, N=1160 57 43 0 Size N=3488 76 24 0 Medium, N=158 70 30 0 N=532 79 21 0 Chisinau, N=2628 31 69 0 N=9749 54 46 0 North, N=631 17 83 0 Region N=2313 31 69 0 Center, N=775 27 73 0 N=2921 74 26 0 South, N=247 20 80 0 N=921 21 79 0 Yes No Don't know 70 Moldavija INDD Final.indd 70 16-Mar-18 10:22:58 AM Female-owned and male-owned companies do not differ in amounts spent on acquisition of machinery, vehicles, and/or equipment. On average female-owned companies spent 779,961 MDL on acquisition of machinery, vehicles, and/or equipment (Figure 7.9). Amounts spent on such fixed assets varied for female-owned companies as a function of industry (F(5, 7799)=216.6, p=.00) and size of the company (F(2, 7802)=818.7, p=.00). (See also Appendix A.2) Construction firms invested most in fixed assets like machinery and equipment (11,951,571 MDL).Companies in wholesale and agribusinesses spent more on equipment and machinery than companies in manufacturing, services, and retail (mean differences>568225.6, p<.00). Companies in wholesale invested on average 1,206,467 MDL, while firms in agriculture invested an average of 1,200,013 MDL on such assets. Meanwhile, medium sized companies invested more than small and micro firms in machinery (mean differences >693957.9, p=.00). Investments in lands and buildings were smaller. (See Appendix A.3 for mean, median and quartile values for amounts spent on acquisitions of land and building). In general, female-owned companies spent 146,628 MDL on such investments. Similar to expenses on machinery and equipment, expenses on land and building were greater for companies in agriculture (329.683 MDL) and for middle-sized companies (903,970 MDL). Companies in retail, wholesale, construction, and the hotel/restaurant industry did not invest in land and buildings in 2016. Figure 7.9 displays mean values of amounts spent by female-owned companies on acquisition of fixed assets and Appendices 2 and 3 detail the median, lower quartile and upper quartile values of the amounts spent on such acquisitions. Figure 7.9: Amounts Spent on Acquisition of Fixed Assets, Female-owned Companies, MDL Total, N=1450 779961 146628 Agriculture, N=313 1200013 329683 Manufacturing, N=223 267785 37444 Retail trade, N=296 72451 0 Industry Wholesale trade, N=307 1206467 0 Construc �on, N=13 11951571 0 Hotel or restaurant, N=2 0 0 Other services, N=295 121658 181498 Micro, N=535 81593 0 Size Small, N=750 897585 13966 Medium, N=165 2795584 903970 Chisinau, N=953 780384 12329 North, N=169 1222746 Region 337840 Center, N=251 429418 644385 South, N=76 1247046 0 New or us ed machinery, vehicles, a nd equipment 1 La nd a nd buildings Both female-owned and male-owned companies relied largely on internal funds or retained earnings to fund acquisitions of fixed assets (Figure 7.10). However, male-owned companies relied on internal funds significantly more than female-owned companies (u=4064497, p=.00). Thus, while 65 percent of male-owned companies’ investments in fixed assets came from internal sources, just 59 percent of similar investments of female-owned companies had internal sources as the same source of funding. Female-owned companies, on the other hand, relied far more heavily on loans from banks (u=3396998.0, p=.00), up to 31 percent of female-owned companies’ investments being sourced from loans. Companies in wholesale relied more heavily on loans from banks than companies from other economic sectors. Thus, 98 percent of the finances used for fixed assets by firms in wholesale were borrowed from banks. Second to wholesale are agribusinesses that borrowed from banks and other financial institutions, with up to 25 percent of funds invested in the acquisition of fixed assets. It appears that small companies were more likely to apply for bank loans than companies of other sizes to finance acquisitions of fixed assets – 50 percent of such investments in small companies were funded through loans from banks. As well,In addition, companies in the capital and the north of the country used bank loans to a larger extent to pay for fixed assets than companies in any other region of Moldova (F(2, 8719)=458.6, p=.00). Supporting Women’s Entrepreneurship in Moldova 71 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 71 16-Mar-18 10:22:58 AM Companies in some industrial sectors made use of funds from state programs to finance acquisition of fixed assets. Thus, 5 percent of the expenses incurred by manufacturing businesses for fixed assets were covered by funds from the state. The same industry made use on a larger scale than businesses in other sectors of purchases on credits from suppliers and advances from customers. Of expenses for acquisition of fixed assets by SME’s in manufacturing, 8 percent were covered by purchases on credits or advances from customers. The report shows that 3 percent of female-owned companies used remittances to finance acquisition of fixed assets, on average, they coveredcovering up to 30 percent of expenses for fixed assets by such means. Figure 7.10: Sources of Finance for Acquisition of Fixed Assets, Type of Company, % Female - owned companies Male - owned companies Total, N=1184 59 3 31 1 1130 N=7539 65 6 4 15 10 Agriculture, N=204 58 3 25 5 2 140 N=483 80 3 10 05 2 Manufacturing, N=168 71 6 8 15 8 0 N=644 67 7 21 3 1 00 Retail trade, N=291 86 60 8 0 N=1923 22 19 59 0 Industry Wholesale trade, N=305 2 0 98 0 N=56 100 0 Construction, N=13 95 050 N=1717 52 05 43 Hotel or restaurant, N=2 100 0 N=0 0 Other services, N=201 98 1 10 N=2716 100 0 Micro, N=407 82 13 033 8 0 N=4506 74 810 16 Small, N=665 44 3 50 2 N=2650 Size 0 10 48 27 43 Medium, N=111 68 8 19 222 N=383 76 3 16 6 Chisinau, N=823 56 3 37 0220 N=4480 48 9 1 25 17 North, N=105 49 0 36 8017 N=706 94 25 Region Center, N=207 75 3 720 1 12 N=2162 92 151 South, N=49 78 0 15 5 2 0 N=191 48 1 33 13 5 Internal funds or retained earnings Owners’ contribution or issued new equity shares Borrowed from banks: private and state-owned Borrowed from non-bank nancial institutions Financial support through the state programs Purchases on credit from suppliers and advances from customers Friends, Family, Informal Lenders, and Remittances Other 3. Loans At the time of the survey, 34 percent of female-owned companies and 22 percent of male-owned companies had a loan or line of credit at the time of the survey (Figure 7.11). Female-owned companies were more likely to have a loan than male-owned companies (x2 (1) = 287.6, p = .00). Analysis showed that female-owned companies that were more likely to have loans were small companies and businesses in construction and manufacturing. For instance, 43 percent-48 percent of female-owned companies in retail trade and, agriculture, and 63 percent companies in wholesale had a loan at the time of the survey. In the meantime, female-owned small enterprises are more likely to have a loan than micro and medium enterprises, and 65 percent of female-owned small companies, 47 percent of female-owned medium companies, and just 21 percent of micro companies had loans in 2016. Companies in the north of the country are more likely to have a loan than companies in other regions. Thus, 75 percent of companies in the North, but less than 30 percent of companies in other regions of Moldova hold loans. The average number of credit lines by female-owned companies that were open at the time of the survey is one, regardless of region, size of company, or industry. 72 Moldavija INDD Final.indd 72 16-Mar-18 10:22:58 AM Figure 7.11: Incidence Establishment having a Line of Credit or a Loan from a Financial Institution Type of Company, % Female - owned companies Male - owned companies Total, N=4281 34 66 0 N=15905 22 79 0 Agriculture, N=308 48 52 0 N=1091 30 70 0 Manufacturing of, N=528 39 59 3 N=1423 35 66 0 Retail trade of, N=1357 43 57 0 N=4188 52 49 0 Industry Wholesale trade of, N=773 63 37 0 N=94 80 20 0 Construction of, N=211 3 97 0 N=3251 1 99 0 Hotel or restaurant, N=187 0 100 0 N=744 0 100 0 Provide services of, N=916 2 98 0 N=5114 7 93 0 Micro, N=2962 21 79 0 N=11885 7 94 0 Small, N=1160 65 35 0 N=3488 Size 64 36 0 Medium, N=158 47 54 0 N=532 78 22 0 Chisinau, N=2628 28 71 1 N=9749 15 85 0 North, N=631 75 26 0 N=2313 28 72 0 Region Center, N=775 22 78 0 N=2921 20 80 0 South, N=247 29 71 0 N=921 81 19 0 Yes No Don't know To obtain loans Moldovan companies applied to either private commercial banks or to non-bank financial institutions (Figure 7.12). Almost all male-owned companies applied to banks for loans, while female-owned companies also considered types of financial institutions. Of all female-owned companies, 6 percent borrowed from other types of financial institutions. Micro-sized companies applied for loans from financial institutions and not from small- or medium- sized companies. In fact, 15 percent of micro-sized companies that received loans, borrowed from non-bank institutions. In addition, such companies are more likely to be in wholesale – 19 percent of wholesale companies that have loans obtained got them from non-bank financial institutions. From a regional perspective, companies that received loans from companies other than banks are located in the capital. Thus, 13 percent of loan beneficiaries in Chisinau borrowed from non-bank financial institutions. Figure 7.12 Financial Institutions that Offered Loans, Type of Company, % Female - owned companies Male - owned companies Total, N=1449 94 070 N=3412 99 0 1 0 Agriculture, N=149 100 0 N=326 100 0 Manufacturing, N=206 99 0 1 0 N=491 91 090 Retail trade, N=584 100 0 N=2158 100 0 Industry Wholesale trade, N=489 81 0 19 0 N=76 100 0 Construction, N=7 100 0 N=19 100 0 Hotel or restaurant, N=0 0 N=0 0 Other services, N=14 100 0 N=342 100 0 Micro, N=623 85 0 15 0 N=775 100 0 Small, N=753 100 0 N=2222 99 0 1 0 Size Medium, N=74 100 0 N=414 95 050 Chisinau, N=740 87 0 13 0 N=1431 100 0 North, N=470 100 0 N=656 100 0 Region Center, N=168 100 0 N=576 92 080 South, N=72 100 0 N=749 100 0 Private commercial banks Non-bank nancial institutions Government agency Don't know Other Supporting Women’s Entrepreneurship in Moldova 73 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 73 16-Mar-18 10:22:58 AM Most of the time, loans borrowed by companies required collateral, including 92 percent of loans to female-owned companies and 97 percent of loans to male-owned companies (Figure 7.13). The latter difference is statistically significant (x2 (1) =57.1, p = .00). Most of the variation caused by non-requirement of collateral is caused by the fact that companies that borrowed from non-bank financial institutions were not required to secure the loan by collateral. Figure 7.13: Incidence of the Most Recent Line of Credit or Loan Requiring Collateral, Type of Company, % Female - owned companies Male - owned companies Total, N=1449 92 80 N=3412 97 3 0 Agriculture, N=149 95 50 N=326 100 0 Manufacturing of, N=206 99 1 0 N=491 84 16 0 Retail trade of, N=584 100 0 N=2158 100 0 Industry Wholesale trade of, N=489 81 19 0 N=76 100 0 Construction of, N=7 65 35 0 N=19 0 100 0 Hotel or restaurant, N=0 0 N=0 0 Provide services of, N=14 83 17 0 N=342 100 0 Micro, N=623 84 16 0 N=775 100 0 Small, N=753 100 0 N=2222 99 1 0 Size Medium, N=74 90 100 N=414 83 18 0 Chisinau, N=740 86 14 0 N=1431 98 2 0 North, N=470 98 2 0 N=656 97 3 0 Region Center, N=168 100 0 N=576 92 80 South, N=72 100 0 N=749 100 0 Yes No Don't know Often, female-owned companies have secured loans by offering collateral in the form of immovable property, such as land or buildings, or machinery and equipment (Figure 7.14). Of female-owned companies that were required to post a collateral, 77 percent provided land or buildings. Female-owned companies in the services industry (especially construction), and manufacturing offered land and buildings as collateral more often than agribusiness. Thus, female-owned companies offered land plots and/or buildings to secure their collateral as follows: 60 percent of agribusinesses, 72 percent of in manufacturing, 76 percent in wholesale, 79 percent in services (other than retail, wholesale, construction, and the hotel/restaurant industry), 83 percent in retail, and all 100 percent in construction. In general, the personal assets of the owners are the second most popular form of assets offered to secure loans taken out by female- owned companies. Meanwhile, for male-owned companies, the first form of assets offered to secure loans is machinery and equipment, the second form is land and buildings, and the third form is the personal assets of the owner. Although, 39 percent of female-owned companies and 31 percent of male-owned companies had secured loans by offering the assets of the owner, the difference is significant, (x2 (1) = 19.9, p = .00). Female-owned medium- sized and small companies are more likely to offer land or buildings as collateral. In addition, more companies in the North (92 percent) than any other regions offered land and buildings for such purposes, although companies in the capital also offered primarily land and buildings (81 percent). Female-owned companies in the North (80percent%) were also more likely than companies in other parts of the country to offer the personal assets of the owner in order to secure the collateral. The data shows that 31 percent of female-owned companies secured loans by offering machinery or equipment. All female-owned companies in agriculture and 47 percent in construction had offered such collateral. In the meantime, 91 percent of companies in the center of the country put up such collateral. 74 Moldavija INDD Final.indd 74 16-Mar-18 10:22:59 AM Figure 7.14: Forms of Collateral, Type of Company, % Female - owned companies Male - owned companies Total, N=1340 77 31 8 39 8 N=3316 74 72 35 31 1 Agriculture, N=142 60 96 426 N=326 35 70 30 10 Manufacturing of, N=203 72 37 2 63 4 N=414 74 62 10 26 Retail trade of, N=582 83 17 17 61 16 N=2158 76 70 52 23 Industry Wholesale trade of, N=397 76 24 N=76 75 49 0 Construction of, N=5 100 47 N=0 0 Hotel or restaurant, N=0 0 N=0 0 Provide services of, N=12 79 58 N=342 100 100 0 100 Micro, N=521 72 30 0 79 1 N=775 1310 87 Small, N=753 81 29 131413 N=2199 95 94 51 16 1 Size Medium, N=66 77 65 17 12 N=342 78 72 13 4 Chisinau, N=637 81 20 16 17 15 N=1398 96 92 83 1 North, N=462 92 22 0 80 N=638 78 97 2 66 5 Region Center, N=168 29 91 3142 N=531 82 78 0 18 South, N=72 60 51 2 24 8 N=749 25 9 68 0 Land, buildings under ownership of the establishment Accounts receivable and inventories Other forms of collateral Machinery and equipment including movables Personal assets of owner The mean value of the required collateral was 104 percent (Figure 7.15). Nonetheless, it appears that female-owned companies secured collaterals of significantly greater value than male- owned companies (u=950943.0, p=.00). Thus, on average, female- owned companies secured collaterals worth 126 percent of the value of the loan, while male-owned companies secured loans by granting collaterals worth 90 percent of the value of the loan. Female-owned companies in manufacturing, construction, and wholesale offered collaterals significantly smaller than the value of the loan, compared to other industries. Thus, while female-owned companies in wholesale had collaterals worth 59 percent of the loan’s value, manufacturing companies were granted loans with collaterals worth 83 percent of its value, and companies in retail and agriculture had the most expensive collaterals, worth between 172 percent and 183 percent of the loan value. Female-owned companies from the capital placed collaterals worth 69 percent of the value of the loan, while companies in the Center and North had secured collaterals worth 159 percent and 179 percent respectively. Female-owned companies in the South had secured the loan with the most expensive collaterals. On average companies in the South had collateral worth 207 percent of the loan’s value. Figure 7.15 Value of the Collateral, Type of Company, % Female - owned companies Male - owned companies Total, N=1323 126 N=2019 90 Agriculture, N=133 183 N=229 134 Manufacturing of, N=195 83 N=399 85 Retail trade of, N=582 172 N=1012 46 Industry Wholesale trade of, N=397 59 N=37 78 Construction of, N=5 80 N=0 0 Hotel or restaurant, N=0 0 N=0 0 Provide services of, N=12 164 N=342 200 Micro, N=521 167 N=678 21 Small, N=741 96 Size N=1071 119 Medium, N=61 134 N=270 147 Chisinau, N=630 69 N=218 100 North, N=454 179 N=638 157 Region Center, N=168 159 N=414 101 South, N=72 207 N=749 24 Supporting Women’s Entrepreneurship in Moldova 75 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 75 16-Mar-18 10:22:59 AM Almost 15 percent of business owners have personal loans that they use for business (Figure 7.16). Of female-owned companies, 23 percent of owners borrowed to invest in their business activity, while just 12 percent of owners of male-owned businesses did the same. Therefore, owners of female-owned SME’s are significantly more likely than owners of male-owned SME’s to have personally applied for a loan to use for business activity (x2 (1) = 376.9, p = .00). Such borrowing is more common among owners of female-owned wholesale and manufacturing companies. Of owners of female-owned wholesale businesses, 51 percent have personally applied for loans, and 33 percent% owners of female-owned manufacturing businesses did the same. In agriculture and wholesale, more owners of male-owned companies personally applied for loans than did owners of female-owned companies. In contrast to male-owned companies, owners of female-owned companies who personally borrowed for business purposes, are concentrated in the capital city. In Chisinau, 36 percent of owners of female-owned companies have personally taken a loan. Meanwhile, no more than 4 percent of owners of female-owned companies in provincial Moldova have personally taken a loan. Figure 7.16: Incidence of Establishment Owners having any Outstanding Personal Loans that are Used to Finance this the Establishment’s Business Activities, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 23 69 8 N=15905 12 81 7 Agriculture, N=308 15 84 2 N=1091 27 73 0 Manufacturing of, N=528 33 57 11 N=1423 14 68 19 Retail trade of, N=1357 7 86 7 N=4188 12 87 1 Industry Wholesale trade of, N=773 51 49 0 N=94 21 79 0 Construction of, N=211 2 54 44 N=3251 2 99 0 Hotel or restaurant, N=187 0 99 1 N=744 0 100 0 Provide services of, N=916 32 58 10 N=5114 17 69 15 Micro, N=2962 18 75 7 N=11885 14 78 8 Small, N=1160 38 51 11 Size N=3488 5 95 0 Medium, N=158 9 79 12 N=532 13 73 14 Chisinau, N=2628 36 52 12 N=9749 1 89 10 North, N=631 3 95 2 N=2313 4 92 4 Region Center, N=775 4 94 2 N=2921 41 59 0 South, N=247 0 100 0 N=921 57 43 0 Yes No Don't know In 2016, 31 percent of female-owned companies applied for a loan (Figure 7.17). Statistics show that significantly more female-owned companies rather than male-owned companies applied for loans in 2016 (x2 (1) = 164.7, p = .00). Up to 47 percent small and medium female-owned companies applied for loans, while just 24 percent of micro-sized female-owned firms took out loans. Beside size of the company the region where a company operates is also a predictor of the likelihood of the company to have applied for a loan. Of female-owned companies in the North, 74 percent applied for a loan, in contrast to up to 22- to 25 percent for companies in other parts of the country. Meanwhile, just 27 percent of male-owned companies in the North also applied for a loan. By Industry,-wise, it appears that female-owned companies in wholesale, retail, and agriculture applied more often for a loan,. with 63 percent of female-owned companies in wholesale, 43 percent of female-owned companies in agriculture, and 36 percent female-owned companies in retail declaring that they applied for a loan in 2016. 76 Moldavija INDD Final.indd 76 16-Mar-18 10:22:59 AM Figure 7.17: Incidence of Establishments Applying for any Lines of Credit or Loans, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 31 69 0 N=15905 22 78 0 Agriculture, N=308 43 57 0 N=1091 38 62 0 Manufacturing, N=528 20 80 0 N=1423 34 66 0 Retail trade, N=1357 36 64 0 N=4188 52 49 0 Industry Wholesale trade, N=773 63 37 0 N=94 20 80 0 Construction, N=211 5 95 0 N=3251 1 99 0 Hotel or restaurant, N=187 0 100 0 N=744 0 100 0 Other services, N=916 11 89 0 N=5114 7 93 0 Micro, N=2962 24 76 0 N=11885 8 92 0 Small, N=1160 47 53 0 Size N=3488 63 37 0 Medium, N=158 51 49 0 N=532 58 42 0 Chisinau, N=2628 24 76 0 N=9749 15 85 0 North, N=631 74 26 0 N=2313 27 73 0 Region Center, N=775 22 78 0 N=2921 21 79 0 South, N=247 25 75 0 N=921 80 20 0 Yes No Don't know More than a half (57 percent) of companies that did not apply for a loan in 2016, said they did not apply because they already had sufficient capital to conduct business (Figure 7.18). The proportion of female- owned and male-owned companies that declared this reason is similar. Nonetheless, about 30 percent of female-owned companies (in contrast to 21 percent of male-owned companies), did not borrow because interest rates were disadvantageous. However, more male-owned companies (8 percent) than female-owned companies (5 percent) declared that collateral requirements were too high. Companies in the North were more likely to not apply for a loan because of perceived high rates, and in fact, 83 percent of female-owned companies in this region claimed they did not borrow because of high interest rates. Of female-owned companies in the center region, 54 percent claimed the same. In addition, companies from provincial areas of the country claim that because of higher rates, the resulting collateral requirement is an impediment for them to apply for loans. Hence, while just 5 percent of female-owned companies in Chisinau said they did not apply for loans because of collateral requirements, 5 percent female-owned companies in the North, 9 percent of female- owned companies in the South, and 4 percent of female-owned companies in the Center claimed this reason. Interest rates were also more of an impediment to borrowing for companies in manufacturing and the retail trade. Up to 41 percent of female-owned companies in manufacturing and 34 percent of female-owned companies in retail declared that disadvantageous interest rates hindered them from borrowing. Of female-owned companies in all economic sectors, female-owned companies in agriculture were more prone to declare collateral requirements areas an impediment to borrowing (23 percent in this category, while up to 2 percent in other sectors, mentioned it). Figure 7.18: Reasons to Not Apply for a Loan, % Female - owned companies Male - owned companies 0 Total, N=2952 54 0 30 5 0 11 0 N=12461 57 0 21 8 10 6 6 Agriculture, N=174 54 2 21 23 N=672 43 0 12 21 10 0 15 0 Manufacturing, N=423 45 1 41 20 9 02 N=936 78 0 20 2 Retail trade, N=867 65 1 34 0 N=2030 37 0 63 0 Industry Wholesale trade, N=284 67 0 33 0 N=76 100 0 Construction, N=201 51 0 49 0 N=3233 49 2 27 0 23 Hotel or restaurant, N=187 52 0 49 0 N=744 100 0 Other services, N=815 42 0 23 12 0 23 0 N=4772 63 04 18 0 16 Micro, N=2260 60 0 24 10 14 0 N=10935 61 0 14 9 10 7 7 Small, N=614 N=1302 23 0 75 2 Size 29 0 51 19 01 Medium, N=77 63 3 25 30 6 N=224 76 0 16 8 Chisinau, N=1994 58 0 21 5 0 16 01 N=8287 79 13 9 9 North, N=166 13 0 83 50 N=1693 8 0 83 5 40 Region Center, N=607 41 1 54 40 N=2296 16 0 41 39 040 South, N=185 88 03 9 N=185 58 0 15 26 0 No need for a loan - establishment had su cient capital Did not think it would be obtained because I am not registered Did not think it would be approved Interest rates were not favorable Not satis ed with the loan period Other Size of loan and maturity were insu cient Application procedures were complex Don't know Collateral requirements were too high Supporting Women’s Entrepreneurship in Moldova 77 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 77 16-Mar-18 10:22:59 AM Of companies that applied for credits, 89 percent declared that their application was approved in full, while 4 percent said the application was approved in part (Figure 7.19). Applications submitted by female-owned companies were approved in full 98 percent of the time, 1.8 percent were approved in part and 2 percent were rejected. Loan applications submitted by female-owned companies in agriculture were accepted 93 percent of the time, while applications filled by male-owned companies in agriculture were accepted in 86 percent of the cases. It is also noticeable that slightly over a third of applications submitted by female-owned companies in construction were rejected, and that only 74 percent of applications submitted by companies in this sector were accepted. Figure 7.19: Results of 2016 Loan Applications, % Total, N=4773 4 89 43 Agriculture, N=553 34 61 4 Manufacturing, N=593 0 72 3 25 0 Retail trade, N=2648 0 95 50 Industry Wholesale trade, N=508 0 100 0 Construction, N=28 0 25 66 90 Hotel or restaurant, N=0 0 Other services, N=444 0 100 0 Still in process Micro, N=1652 12 79 1 90 Small, N=2732 0 95 50 Application was approved in full Size Medium, N=389 0 91 910 Application was approved in part Chisinau, N=2096 0 91 2 70 Application was rejected North, N=1086 0 99 1 0 Region Center, N=794 24 76 0 Application was withdrawn South, N=798 0 82 18 0 Don't know D. Buildings and Land This sub-chapter displays research findings regarding the share of owned versus rented or leased facilities and land plots (Figure 7.20). Disaggregated data is explored, and significant differences are presented. In general, 37 percent of buildings occupied by establishments are owned by them, and the other 62 percent are rented or leased. Female-owned companies own significantly more building space than male-owned companies (u=27986735.0, p=.00). On average, female-owned companies own about 46 percent of their buildings and male-owned companies own about 35 percent of their buildings. Female-owned businesses in construction and the hotel/restaurant industry own significantly more building place, than in any other economic sectors and more than male-owned companies in the same sectors. Female-owned medium-sized companies are more likely than small- and micro-sized companies to own buildings, – with 44 percent of micro firms, 48 percent of small firms, and 69 percent of medium-sized firms, said saying they have ownership of the building they occupy. In regards to female-owned companies it should also be noted that 92 percent of companies in the north of the country are proprietors of the buildings they occupy, while in Chisinau 26 percent of firms rent their premises. Figure 7.20 Status of Buildings Occupied by Businesses, Type of Company, % Female - owned companies Male - owned companies Total, N=4182 46 054 N=15092 35 65 0 Agriculture, N=302 53 0 47 N=1021 58 42 0 Manufacturing, N=528 51 0 49 N=1423 58 42 0 Retail trade, N=1357 55 0 45 N=4188 24 76 0 Industry Wholesale trade, N=773 Owned by this 1 99 0 N=94 61 39 0 establishment Construction, N=118 97 0 3 N=2508 66 32 2 Hotel or restaurant, N=187 100 0 N=744 0 100 0 Other services, N=916 47 53 0 N=5114 23 77 0 Rented or leased Micro, N=2864 44 56 0 N=11072 27 72 0 by this Small, N=1160 48 52 0 N=3488 establishment Size 53 47 0 Medium, N=158 69 31 0 N=532 81 19 0 Chisinau, N=2529 26 74 0 N=9006 25 74 1 Other North, N=631 92 80 N=2244 19 81 0 Region Center, N=775 62 38 0 N=2921 61 39 0 South, N=247 81 19 0 N=921 89 110 78 Moldavija INDD Final.indd 78 16-Mar-18 10:23:00 AM Of female-owned companies, 21 percent reported that they conducted business on residential property, as did 25 percent of male-owned companies (Figure 7.21). Significantly more male-owned companies conducted business on residential property than female-owned companies (x2 (1) = 30.5, p = .00). Companies of different sizes differ in the likelihood of having operated on residential property. While 21 percent of small female-owned companies mentioned that the business used to be located on such premises, just 6 percent of medium companies claimed the same. In addition, more small male-owned companies claimed having operated on residential property (35 percent). Female-owned companies in manufacturing are more likely to declare they operated on residential property (27 percent). Female-owned and male-owned companies in the capital were as likely to declare having operated business on residential property (28 percent and 37 percent respectively have declared it). However, in the center part of the country significantly more female-owned companies than male- owned companies said that they had conducted business on residential property (21 percent and 7 percent respectively). Figure 7.21: Incidence of the Firm’s Activities ever having been Conducted on Residential Property, Type of Company, % Female - owned companies Male - owned companies Total, N=4278 21 79 N=15905 25 75 Agriculture, N=308 15 85 N=1091 28 73 Manufacturing, N=528 27 73 N=1423 15 85 Retail trade, N=1357 16 84 N=4188 27 73 Industry Wholesale trade, N=773 12 88 N=94 0 100 Construction, N=208 47 54 N=3251 47 53 Hotel or restaurant, N=187 0 100 N=744 0 100 Other services, N=916 31 70 N=5114 15 86 Micro, N=2962 21 79 N=11885 23 77 Small, N=1160 21 79 N=3488 35 65 Size Medium, N=156 6 94 N=532 0 100 Chisinau, N=2628 26 74 N=9749 37 63 North, N=628 1 99 N=2313 3 97 Region Center, N=775 21 79 N=2921 7 93 South, N=247 16 84 N=921 4 96 Yes No Generally, 43 percent of lands used by Moldovan companies are held in ownership by these entities (Figure 7.22). Female-owned companies hold property on 69 percent of land plots that they use for business purposes, while male-owned companies own 38 percent of the land plots. Female-owned companies own a significantly larger portion of the land plots they use than male-owned companies (u=5363781.0, p=.00) There are significant differences in the proportion of land plots owned by female-owned companies various industries (F(6, 10869)=81.7, p=.00). Female-owned companies in agriculture and wholesale own the least proportion of land plots in contrast to other industries. Female-owned agribusinesses own about 39 percent of the land they use, and male-owned companies own about 28 percent of the plots. The difference is significant, because female-owned companies in agriculture have more land in property (u=135923.5, p=.00). Among female-owned companies, enterprises in wholesale own the least proportion of plots they occupy. Female-owned companies in wholesale declared ownership to just over 6 percent of their land plots. In contrast, male-owned companies in the same industry own about 61 percent of lands. Yet female-owned companies in construction, retail and the hotel/restaurant industry own significantly larger proportions of plots they use, than companies in other industries. For instance, female-owned retail companies declared ownership of more than 81 percent of land plots, and construction companies of more than 99 percent of lands. Interestingly, in the case of female-owned companies, micro-sized companies tend to declare ownership over significantly larger proportions of land plots, than small companies (mean difference=16.0, p=.00) and medium companies (p=.00). Female- owned micro and small companies declared ownership over an average proportion of 70 percent of land plots, while medium companies over 62 percent of such property. Supporting Women’s Entrepreneurship in Moldova 79 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 79 16-Mar-18 10:23:00 AM From a geographical point of view, there are significant differences between the size of ownership of land plots possessed by female-owned companies (F(3,10872)=79.63, p=.00). In contrast to other parts of the country, companies in the north of the country own the largest proportion of land plots they use (87 percent) (mean differences >5.4, p’s.00). In the meantime, female- owned companies in the Center own the smallest proportion of land plots they occupy (36 percent) (mean differences > -51.34, p’s < .00). However, female-owned companies in the capital also own smaller proportions of land plots than companies in the North and South (mean differences > -5.4, p’s < .00). Figure 7.22: Status of Lands used by the Businesses, Type of Company, % Female - owned companies Male - owned companies Total, N=1962 69 30 1 N=8915 38 62 0 Agriculture, N=308 39 61 0 N=1091 28 72 0 Manufacturing of, N=310 66 29 6 N=569 64 36 0 Retail trade of, N=603 81 19 0 N=3445 29 71 0 Industry Wholesale trade of, N=99 6 94 0 N=94 61 39 0 Construction of, N=116 99 10 N=1698 53 47 0 Hotel or restaurant, N=95 99 10 N=0 0 Provide services of, N=431 77 23 0 N=2018 35 65 0 Micro, N=1090 69 29 1 N=5235 29 71 0 Small, N=747 70 29 1 N=3213 48 52 0 Size Medium, N=126 62 38 0 N=467 66 34 0 Chisinau, N=723 61 37 3 N=3870 23 77 0 North, N=628 87 13 0 N=2296 6 94 0 Region Center, N=365 52 48 0 N=1917 86 14 0 South, N=246 74 26 0 N=832 83 17 0 Owned by this establishment Rented or leased by this establishment Other E. Use of Information Technology (IT) This part deals with the degree to which different companies use computers to carry out business, e-mail to connect suppliers and clients, and web-sites, or on-line platforms to do business. It also looks at differences regarding female-owned and male-owned companies. 1. Use of computers The vast majority of enterprises own computers and use them in their business- related activities. Of all companies, just 1 percent declared not owning computers. The rest of firms use computers for a variety of purposes (Figure 7.23). The area of work where computers are used by most firms is accounting, and. 91 percent of firms use software for accounting. The second most often claimed reason to use computers is access to the iInternet (78 percent of firms). Female-owned and male-owned companies differ in the extent to which they use computers. Although the vast majority of firms do use computers, 2.7 percent of female- owned companies declared not owning a computer, while just 0.4 percent male-owned companies declared the same. The chi- square statistic shows that the difference is significant (x2(1) = 184.5, p = .00). Thus, male-owned companies are more likely than female-owned companies to own a computer. As pointed out earlier, accounting is the primary purpose of computer use in Moldovan companies. Use of technology for accounting decreases with the size of the firm. Thus, 96 percent of female-owned micro companies use computers for accounting, while all 100 percent of medium-sized companies use computers for accounting. There are geographical differences as to the use of computers and technology for accounting. While, among female-owned companies the use of computers for accounting purposes averages at 97 percent in the entire country, just 85 percent of female-owned companies in the center of Moldova use computers for accounting. 80 Moldavija INDD Final.indd 80 16-Mar-18 10:23:00 AM Access to the iInternet is the second most often invoked purpose of the use of computers. Of female-owned companies, 79 percent use computers to access online sites. The use of computers for the Internet increases with the size of the company. This tendency is especially noticeable among female-owned companies. Thus, 75 percent of micro companies but 91 percent of medium companies declared using computers for the Internet in the case of accounting, use of computers to access the Internet varies geographically. It appears that 55 percent and 38 percent of companies in the center and south of the country respectively claimed that they used computers to go online. In agriculture and manufacturing up to 76 percent of female-owned companies use computers for production management. In addition, it appears that production is managed technologically more by small and medium-sized companies, of which 79 percent to 85 percent reported using computers for such purposes. Generally, word processing is the third purpose for company use of computers. Retailers use computers for word processing less than companies in other sectors, with just 25 percent declaring they use computers for this reason, while 67 percent in manufacturing, and over 99 percent in the hotel/restaurant industry and construction said the same. As with other uses of computers, companies in the center of the country declared using computers for word processing less than firms in other regions. Just 27 percent of female-owned firms in this region declared using computers for word-processing. Figure 7.23: Purposes to for Use of Computers, for, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 97 56 56 79 N=15905 90 42 45 77 Agriculture, N=308 95 76 45 68 N=1091 94 511739 Manufacturing, N=528 95 57 67 83 N=1423 100 62 39 58 Retail trade, N=1357 93 37 25 65 N=4188 100 55 67 100 Industry Wholesale trade, N=773 100 76 88 100 N=94 100 100 100 100 Construction, N=211 100 55 100 100 N=3251 77 3027 51 Hotel or restaurant, N=187 100 100 99 99 N=744 100 0 Other services, N=916 99 53 54 75 N=5114 86 37 51 100 Accounts Micro, N=2962 96 46 48 75 N=11885 87 34 40 79 Production management Small, N=1160 98 79 73 87 N=3488 100 63 58 70 Size Word processing Medium, N=158 100 85 84 91 N=532 100 94 70 80 N=9749 85 23 49 82 Internet Chisinau, N=2628 99 49 73 87 North, N=631 100 96 30 91 N=2313 97 88 77 86 Other Region Center, N=775 85 56 27 55 N=2921 100 5518 52 Lack of computer N=921 100 85 6 80 Don't know South, N=247 98 403438 2. Use of eE-mail A majority (89 percent) of companies use e-mail to communicate with customers and/or suppliers (Figure 7.24). Female-owned and male- owned companies differ in the use of e-mail for business communications (x2 (1) = 14.7, p = .00), with female-owned companies using e-mail significantly more than male-owned companies. Among female-owned companies, use of e-mail is practiced by all medium-sized and small-sized companies, but in the meantime 86 percent of micro-sized female-owned companies declared using e-mail to converse with customers or suppliers. Use of e- mail is less common among companies in the center of the country. Among female- owned companies in the Center, 30 percent% do not use e-mail to connect with customers and/or suppliers. With all industries, it appears that female-owned companies in retail are among the companies that use e-mail the least for communication. Supporting Women’s Entrepreneurship in Moldova 81 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 81 16-Mar-18 10:23:00 AM Figure 7.24: Incidence of firms using E-mail to Communicate with Customers, Type of Company, % Female -owned Male -owned Total, N=4281 90 10 N=15905 88 12 Agriculture, N=308 95 5 N=1091 83 17 Manufacturing, N=528 96 4 N=1423 89 11 Retail trade, N=1357 72 28 N=4188 88 12 Industry Wholesale trade, N=773 100 0 N=94 100 0 Construction, N=211 100 0 N=3251 100 0 Hotel or restaurant, N=187 100 0 N=744 100 0 Other services, N=916 100 0 N=5114 80 20 Micro, N=2962 86 14 N=11885 85 15 Small, N=1160 100 0 N=3488 Size 97 3 Medium, N=158 100 0 N=532 100 0 Chisinau, N=2628 93 7 N=9749 98 2 North, N=631 99 1 N=2313 94 Region 6 Center, N=775 73 27 N=2921 67 33 South, N=247 98 2 N=921 43 57 Yes No Don't know 3. Presence of a Web-site Only 28 percent of all companies have a web-site (Figure 7.25). Female-owned companies are more likely than male-owned companies to have web-sites, all other things being equal. When considering companies from the same sector, geographical location, and of the same size, female-owned companies are about 1.8 times more likely to have a web-site. In addition the larger the size of the company, the more likely it is to have a web- site. While 32 percent of female-owned micro companies have websites, 66 percent of medium companies have websites. The location of the company also predicts the likelihood of the company to host a web-site. Generally, female-owned companies in the capital are 2.4 times more likely than firms outside the capital to have a website. More female-owned companies in manufacturing and the hotel/restaurant industry have websites than firms in other industries. Figure 7.25 Incidence of Establishments Currently having their Own Website, Type of Company, % Female -owned Male -owned Total, N=4281 36 64 N=15905 26 74 Agriculture, N=308 23 78 N=1091 14 86 Manufacturing, N=528 51 49 N=1423 28 72 Retail trade, N=1357 22 78 N=4188 28 72 Industry Wholesale trade, N=773 37 63 N=94 79 21 Construction, N=211 7 93 N=3251 24 76 Hotel or restaurant, N=187 100 0 N=744 0 100 Other services, N=916 44 56 N=5114 30 70 Micro, N=2962 32 68 N=11885 20 80 Small, N=1160 41 59 N=3488 39 62 Size Medium, N=158 66 34 N=532 66 34 Chisinau, N=2628 46 54 N=9749 39 61 North, N=631 23 77 N=2313 5 95 Region Center, N=775 20 80 N=2921 5 95 South, N=247 11 89 N=921 5 95 Yes No Don't know 82 Moldavija INDD Final.indd 82 16-Mar-18 10:23:00 AM 4. Use of Online Platforms Online platforms are used by 27 percent of all companies to conduct business with suppliers (Figure 7.26). Meanwhile 31 percent of companies used online platforms to conduct business with customers. There are differences between male-owned and female- owned companies as to the use of online platforms to conduct business. When comparing companies that operate in the same industry, that are of the same size, and that are located in the same region, female-owned companies are 8.8 times more likely to conduct business with suppliers over online platforms and are 6.9 times more likely to conduct business with customersusing them. In regards to female entrepreneurship, significant variation in use of online platforms for business is noticed between companies in the capital and companies outside the capital. In Chisinau, firms in Chisinau are up to 4 times more likely to use online platforms to communicate with customers and are up to 2.15 times more likely to communicate with suppliers by use of online platforms. Figure 7.26 “Incidence in 2016, of Establishments Using any Online Platforms to Conduct Business with Customers/ Suppliers, Female-owned Companies, % Conduct business with Conduct business with suppliers customers Total, N=4281 45 55 48 50 2 Agriculture, N=308 47 53 43 57 0 Manufacturing, N=528 43 57 48 53 0 Retail trade, N=1357 28 72 28 72 0 Industry Wholesale trade, N=773 37 63 49 51 0 Construction, N=211 56 44 54 46 0 Hotel or restaurant, N=187 100 0 100 0 Other services, N=916 63 38 64 26 10 Micro, N=2962 38 62 42 55 3 Small, N=1160 61 39 Size 61 39 0 Medium, N=158 59 41 57 43 0 Chisinau, N=2628 53 47 58 39 4 North, N=631 33 67 30 70 Region 0 Center, N=775 36 64 39 62 0 South, N=247 14 86 12 88 0 Yes No Don't know Supporting Women’s Entrepreneurship in Moldova 83 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 83 16-Mar-18 10:23:01 AM CHAPTER 8: LABOR This chapter includes information regarding the number of full-time and temporary employees in companies and analyzes factors that influence the number of full-time and temporary employees utilized in the companies. The number of full-time employees is contrasted for the years 2014 and 2016,and data is provided regarding the duration of temporary employment, and the ratio of female, versus male temporary employees is considered. Information is presented regarding the number of information technology (IT) professionals in the company, the factors that determine the hiring of IT professionals, and the presence of female IT professionals. Information is provided regarding employee training, the likelihood of different companies offering training to their full-time employees and other categories of employees, the factors that determine this kind of training, and professional training of managers. In addition, the incidence of hiring in general, and the hiring of female employees in particular, from 2014 to 2016, is discussed, and the main reasons for not hiring female employees are compared. A. Number of Employees and Ratio of Female Employees The average number of employees in Moldovan SME’s is 10, with an average of 4 of these being women (Figure 8.1). Thus, women represent a fourth of the workforce in national SME’s. The proportion of female-to-male employees in companies differs in male-owned and female- owned enterprises even when controlling for the effect of other variables. In general, while 50 percent of employees in female-owned companies are female, just 30 percent of employees in male-owned companies are of the same gender. Significantly less women are employed in agriculture than either in manufacturing or the services. Even in female-owned agribusiness companies, the proportion of employed women is at 33 percent. The likelihood of companies employing more women decreases with the size of the company. Thus, an ANOVA showed that micro companies have larger proportions of female employees than do small firms and medium firms (mean differences >4.3, p<.00), while medium companies have larger proportions of female employees than small companies (mean difference=30.4, p=.00). Figure 8.1: Number of Employees, Number of Female Employees, Type of Company, Persons Female - owned companies Male - owned companies Total, N=4281 12 10 6 N=15905 3 Agriculture, N=308 24 15 8 N=1091 4 Manufacturing, N=528 22 22 14 N=1423 9 Retail trade, N=1357 9 8 4 N=4188 3 Industry Wholesale trade, N=773 8 104 3 N=94 35 Construction, N=211 21 10 3 N=3251 1 Hotel or restaurant, N=187 23 4 17 N=744 2 Other services, N=916 8 N=5114 6 4 3 Micro, N=2962 4 N=11885 4 2 2 Small, N=1160 22 15 Size 10 N=3488 5 Medium, N=158 100 N=532 101 43 35 Chisinau, N=2628 12 N=9749 8 6 2 North, N=631 17 N=2313 12 9 5 Region Center, N=775 11 N=2921 12 5 4 South, N=247 13 N=921 13 6 5 Number of employees Number of female employees 1 84 Moldavija INDD Final.indd 84 16-Mar-18 10:23:01 AM There are some geographical differences too. The results of an ANOVA analysis of variance pointed to the conclusion that enterprises in different regions have different proportions of male-to- female employees (F(3, 20181)=92.4, p=.00). In the North and the South, companies are more egalitarian, and hire more women than companies in the capital. Among female-owned companies the female employee ratio is higher in the South and the North, and represents 45 percent and 52 percent respectively. About 21 percent of all companies had IT personnel in 2016. IT specialists represent 13 percent of the workforce in a company. More companies in Chisinau and the Center hired IT professionals. Thus,17 percent of companies in Chisinau and 14 percent of companies in the center region had IT personnel. Male-owned companies are significantly more likely to hire IT personnel (x2(1)= 203.8 p=.00). While 15 percent% of male-owned companies have IT staff, just 7 percent% female-owned companies had such personnel in 2016. The likelihood of a company hiring IT professionals grows with the size of the company. Nonetheless, significantly more medium male-owned companies had IT personnel in 2016 (77 percent), than female-owned medium companies (49 percent). Women represent 3 percent of IT professionals hired by SME’s. Female-owned companies employ 5 percent female IT personnel. It appears that more female IT professionals are hired in the north and the center of the country than in other regions. In addition, in medium- sized companies, more women are hired as IT professionals. Thus, 21 percent of IT staff in medium male-owned companies are women, and 9 percent% of IT staff in medium female-owned companies are women. The data shows that 32 percent% of all SME’s hired full-time temporary employees in 2016. Male-owned companies were more likely than female-owned companies to hire full-time temporary employees (x2(1)=213.7, p=.00). While 35 percent of male- owned companies hired temporary employees, just 23 percent female-owned companies hired them. All other things being equal, male-owned companies are 1.15 times more likely to hire temporary personnel than female-owned companies. Some economic sectors use the work of temporary employees more than other sectors. Female-owned companies in the hotel/ restaurant industry and in manufacturing were more likely than female-owned companies in other sectors to have hired temporary staff. The data shows that 49 percent of female-owned companies in the hotel/restaurant business and 53 percent of companies in manufacturing declared using the services of temporary personnel. Male-owned companies have slightly different dynamics. The greatest number of male- owned companies have used services provided by temporary employees in agriculture. Thus, 74 percent of male-owned agribusinesses mentioned having temporary employees in 2016. Male-owned businesses in construction also employed more temporary workers. In the construction industry, 52 percent of male-owned company mentioned hiring temporary employees. (Female-owned construction companies also declared the using 52 percent temporary employees). The figures also show that 50 percent of temporary staff were women. Female-owned companies hire temporary female- staff at higher rates (u=1834552.0, p=.00). In fact 75 percent of temporary employees hired in 2016 by female-owned companies were women. In some sectors, female-owned companies give priority to hiring women. Thus, all temporary employees hired by the hotel/ restaurant industry in 2016 were women. In agriculture as well, female-owned companies hired more women as temporary staff. 81% oOf temporary employees hired by female-owned companies in agriculture, 81 percent% were women, while just 43 percent% of temporary employees hired by male-owned companies were also women. The average time of temporary employment is six months. Female-owned and male- owned companies differ in the lengths of time for which they offer temporary employment (u=1959564.0, p=.00). In female-owned companies the duration of temporary labor contracts in on average four months, while in male-owned companies it is over six months. Female-owned companies from different industries differ in the duration of temporary employment (F(6, 6481)=63.7, p=.00). For instance, female-owned companies in the hotel/restaurant business hired employees for the shortest periods of time (two months). Female-owned companies in agriculture, also hired temporary workers for shorter periods of time than companies in other sectors (three months). In the meantime, female-owned companies in services other than retail, wholesale, construction, and the hotel/restaurant industry hire on an average period of five months. Supporting Women’s Entrepreneurship in Moldova 85 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 85 16-Mar-18 10:23:01 AM B. Training In 2016, 52 percent% of companies conducted formal training for employees (Figure 8.2). There is a significant difference between the likelihood of male-owned and female-owned companies offering training for employees (x2(1)=122.3, p=.00). Logistic regression showed that male-owned companies were two times more likely to train their personnel in contrast to female-owned companies, considering that the size of the company, the industry, and the geographical location were similar. In addition, the data shows that small-sized companies are eleven times more likely than micro-size companies to conduct formal training for employees. It appears that female-owned companies in manufacturing are the most likely to conduct training for their employees (68 percent of female-owned companies in this sector declared having trained the personnel in 2016). Also, 47 to 52 percent of female-owned enterprises in agriculture and wholesale declared offering training in 2016. More female-owned companies in Chisinau and the center of the country offered training to employees than companies in other regions. Thus, 49 percent of companies in Chisinau and 50 percent of companies in the center region declared that they have offered training in 2016. Figure 8.2: Incidence in Fiscal Year 2016, of an Establishment having Formal Training Programs for its Permanent, Full- time Employees, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 45 55 0 N=15905 55 0 46 Agriculture, N=308 47 53 0 N=1091 40 600 Manufacturing, N=528 68 32 0 N=1423 60 040 Retail trade, N=1357 31 69 0 N=4188 52 0 49 Industry Wholesale trade, N=773 52 48 0 N=94 59 041 Construction, N=211 53 47 0 N=3251 52 0 49 Hotel or restaurant, N=187 50 50 0 N=744 100 0 Other services, N=916 43 57 0 N=5114 54 47 0 Micro, N=2962 29 71 0 N=11885 42 58 0 Small, N=1160 82 18 0 Size N=3488 94 60 Medium, N=158 79 21 0 N=532 77 23 0 Chisinau, N=2628 49 51 0 N=9749 50 50 0 North, N=631 28 72 0 N=2313 31 69 0 Region Center, N=775 50 50 0 N=2921 78 22 0 South, N=247 31 69 0 N=921 91 90 Yes No Don’t know In companies where training was offered for employees, 74 percent of female- employees and 82 percent of male- employees participated in training (Figure 8.3). Female-owned and male-owned companies differ in the number of male employees trained (u=7193596.0, p=.00) and female employees trained (u=7446266.5, p=.00). Male-owned companies trained significantly more male employees than female-owned companies (85 percent and 71 percent) while female-owned companies trained significantly more female employees than male-owned companies (81 percent and 72 percent). Among female-owned companies, more employees participated in training in small enterprises. Thus, female-owned small companies insured training of 86 percent of male employees and 90 percent of female employees. Female-owned micro-sized companies trained the fewest number of employees (54 percent of male employees and 74 percent of female employees). Geographically it appears that female-owned companies in the center region trained the fewest employees, thuswith 68 percent men and 53 percent women in female-owned companies from this region participating in trainings in 2016. 86 Moldavija INDD Final.indd 86 16-Mar-18 10:23:01 AM Figure 8.3: Percentage of Female and Male Employees Trained, Type of cCompany, % Female - owned companies Male - owned companies Total, N=1921 -71 81 N=8644 -85 72 Agriculture, N=145 -88 78 N=434 -76 64 Manufacturing, N=360 -82 87 N=843 -80 91 Retail trade, N=422 -33 83 N=2158 -93 93 Industry Wholesale trade, N=402 -100 76 N=56 -69 58 Construction, N=111 -97 96 N=1675 -64 3 Hotel or restaurant, N=93 -97 98 N=744 -100 100 Other services, N=388 -52 73 N=2735 -90 86 Micro, N=848 -54 74 N=4979 -81 75 Small, N=951 -86 90 N=3255 -93 68 Size Medium, N=123 -71 65 N=411 -64 59 Chisinau, N=1282 -68 90 N=4835 -79 75 North, N=178 -91 85 N=695 -96 78 Region Center, N=385 -68 53 N=2274 -94 61 South, N=76 -97 71 N=839 -83 79 Male, full-time permanent employees trained Female, full-time permanent employees trained The data shows that between 2014 and 2016, 58 percent of female company representatives participated in training to improve professional skills. (Figure 8.4) This proportion stands in stark contrast to the 34 percent proportion of male company representatives who participated in trainings over the last two years. The difference between the number female and male representatives trained from 2014 to 2016 differs significantly (x2(1)=1135.6, p=.00). A large number of fe male top- managers (74 percent) reported having attended training to improve professional skills, compared to 58 percent female non-senior- management personnel, and 34 percent male top- managers. It appears that female top- managers in agriculture, construction, and other services except retail tended to attend more trainings, and more than 85 percent of female top- managers from these industries declared participating in professional trainings over the course of 2014-2016. Female top-managers in retail participated the least in professional training. Just 17 percent declared that they had attended training in the last two years previous to the survey. It should be noted that women who are part of medium- sized companies are more likely than women working for micro and small companies to participate in trainings – 66 percent of female top- managers from medium companies were trained while 72 percent from micro companies undertook training. Fewer women participated in training sessions for augmentation of business or managerial skills. From 2014 to 2016, 34 percent of female company representatives indicated that they participated in such training, and 46 percent of female top- managers mentioned having participated in training for managerial skills. Female top- managers in other services participated in training at rates higher than female top- managers in other industries. Female top- managers in agriculture and the hotel/restaurant business participated the least of top managers of all sectors in training for improvement of managerial skills., lessFewer than 4.5 percent of them indicated that they had participated in any training for business skills. Supporting Women’s Entrepreneurship in Moldova 87 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 87 16-Mar-18 10:23:01 AM Figure 8.4: Incidence during the Last Two Fiscal Years of Attending any Training to Improve Professional or Managerial Skills, Female Respondents, % Training to improve Training to improve professional skills managerial/ business skills Total, N=7305 58 42 34 66 Agriculture, N=543 85 15 44 56 Manufacturing, N=792 67 33 37 63 Retail trade, N=2546 17 83 13 87 Industry Wholesale trade, N=693 43 57 43 57 Construction, N=121 100 0 98 2 Hotel or restaurant, N=187 51 49 51 49 Other services, N=2424 95 5 47 53 Micro, N=4566 72 28 41 59 Small, N=2406 30 70 21 79 Size Medium, N=332 66 34 35 65 Chisinau, N=4395 54 46 24 76 North, N=763 32 68 16 84 Region Center, N=1723 78 22 68 32 South, N=424 69 31 35 65 Yes No Don't know C. Working Arrangements Two-thirds of companies offer flexible working schedules to their employees (Figure 8.5). Female- owned companies are more eager to offer flexible working hours to employees than male-owned companies (x2(1)=22.8, p=.00). However, this tendency is not valid for all economic sectors. For instance male-owned companies in manufacturing and retail are more likely than female-owned companies to grant flexible hours (x2(1)>22.5, p<.00). Female-owned companies in the north of Moldova are offering flexible schedules (96 percent), while 43 percent of female-owned companies in the Ssouth of the country do so. In the capital, 67 percent if female-owned companies provide flexible working hours. Male-owned companies in provincial parts of Moldova are almost all ready to grant flexible hours to employees, while just 50 percent of male-owned SME’s in the capital offer the same benefits. Figure 8.5: Incidence of Establishment Offering Flexible Working Hours, Type of Company, % Fem ale -owned companies Male -owned companies Total, N=4281 68 32 0 N=15905 68 32 0 Agriculture, N=308 89 9 2 N=1091 90 100 Manufacturing, N=528 59 41 0 N=1423 70 30 0 Retail trade, N=1357 65 35 0 N=4188 82 18 0 Industry Wholesale trade, N=773 75 25 0 N=94 39 61 0 Construction, N=211 48 52 0 N=3251 52 48 0 Hotel or restaurant, N=187 99 10 N=744 0 100 0 Other services, N=916 64 36 0 N=5114 71 29 0 Micro, N=2962 67 33 0 N=11885 60 40 0 Small, N=1160 72 27 1 Size N=3488 95 50 Medium, N=158 67 34 0 N=532 73 27 0 Chisinau, N=2628 67 33 0 N=9749 50 50 0 North, N=631 96 31 Region N=2313 97 0 3 Center, N=775 59 41 0 N=2921 95 50 South, N=247 43 57 0 N=921 97 0 3 Yes No Don't know 88 Moldavija INDD Final.indd 88 16-Mar-18 10:23:01 AM More than 99.9 percent of female-owned companies grant paid maternity leave to female- employees. More female-owned companies than male-owned companies offer paid maternity leave (x2(1)=78.1, p=.00). Thus, in contrast to female-owned companies 98 percent of male-owned companies in Moldova also grant paid maternity leave. Companies that do not offer paid maternity leave are male-owned companies in agriculture or manufacturing, and are more likely to be micro-sized and be located in the center of the country. D. Employment Many female-owned companies (66 percent hired new employees in 2016 (Figure 8.6). Female-owned companies were not significantly more likely to have hired in the previous two years to the survey, than male-owned companies (Figure 8.7). Up to 87 percent of female-owned small and medium enterprises hired new employees from 2014 andto 2016. In the same period, just 56 percent of micro, female-owned companies hired new employees. In addition, it appears that almost all (99 percent) companies in the hotel/restaurant industry hired new employees, as did 53 percent of female-owned companies in retail and 9 percent of female-owned companies in construction. Slightly over three- fourths of female-owned companies in the capital hired employees in the two years before the survey. In contrast, 36 percent of female-owned companies in the North and 33 percent in the South also hired. The data shows that 91 percent of female-owned companies have hired women in the 2 years previousprior to the survey and that 90 percent% male-owned companies did the same. Female-owned companies were not statistically significantly more likely to have hired female employees (x2(1)=3.2, p=.07). Thus, female-owned companies were twice as likely to have hired female employees considering that the size, industry, and geographical location of the enterprises were the same. Female-owned companies in manufacturing and wholesale are least likely to have hired women. Thus, 69 percent of female-owned manufacturing firms and 84 percent of businesses in wholesale declared having hired women from 2014 to the end of 2016. Figure 8.6: Incidence over the Last Two Years, of Establishment Hiring any Employees, and of Hiring a Woman, Female-owned Companies, % Female - owned companies Total, N=4281 66 34 0 N=2810 91 90 Agriculture, N=308 67 33 0 N=206 88 12 0 Manufacturing, N=528 78 220 N=413 69 31 0 Retail trade, N=1357 53 48 0 N=713 100 0 Industry Wholesale trade, N=773 76 24 0 N=588 84 16 0 Construction, N=211 9 91 0 N=18 87 13 0 Hotel or restaurant, N=187 99 0 1 N=186 100 0 Other services, N=916 75 25 0 N=686 99 0 1 Micro, N=2962 56 44 0 N=1659 87 13 0 Small, N=1160 87 13 0 Size N=1010 98 0 3 Medium, N=158 90 100 N=142 94 60 Chisinau, N=2628 76 24 0 N=1993 90 100 North, N=631 36 64 0 N=228 90 100 Region Center, N=775 66 34 0 N=509 96 0 4 South, N=247 33 67 0 N=81 88 13 0 Yes No Don't know Yes No Don't know Over the last two years did the establishment hire any employees? Were any of the employees hired over the last two years a woman? In male-owned companies the trends of employment are similar to those of female-owned companies (Figure 8.7). However, it appears that companies in the hotel/restaurant industry, manufacturing, and wholesale were top employers in 2016 among male-owned companies. In addition, male-owned companies in agriculture and manufacturing hired fewer women than did male-owned companies in other industries. In contrast to female-owned companies, just 71 percent of male-owned companies in services other but retail, wholesale, construction, and the hotel/restaurant business hired female employees. Supporting Women’s Entrepreneurship in Moldova 89 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 89 16-Mar-18 10:23:01 AM Figure 8.7: Incidence over the last two years of Establishment Hiring any Employees, and of Hiring a Woman, Male-owned Companies, % Male - owned companies Total, N=15905 66 34 N=10446 90 10 Agriculture, N=1091 44 56 N=479 83 17 Manufacturing, N=1423 79 21 N=1128 81 19 Retail trade, N=4188 70 30 N=2949 100 0 Industry Wholesale trade, N=94 79 21 N=74 100 0 Construction, N=3251 76 24 N=2460 99 1 Hotel or restaurant, N=744 100 0 N=744 100 0 Other services, N=5114 51 49 N=2613 71 29 Micro, N=11885 56 44 N=6656 86 14 Small, N=3488 94 6 N=3278 97 3 Size Medium, N=532 96 4 N=512 94 6 Chisinau, N=9749 65 35 N=6316 85 16 North, N=2313 N=2104 99 1 91 9 Region Center, N=2921 N=1687 100 0 58 42 N=339 77 23 South, N=921 37 63 Yes No Yes No Over the last two years did the establishment hire any employees? Were any of the employees hired over the last two years a woman? Of companies that did not hire women the past two years, 100 percent female-owned companies mentioned that lack of competencies were the main reason why they did not hire the female candidates, and 1 percent of these companies mentioned that family responsibilities of women, and regulations regarding women, were reasons to not hire women. The analysis indicates that female-owned companies are significantly more likely than male-owned companies to declare that family responsibilities of women (x2(1)=16.2, p=.00) and regulations regarding women (x2(1)=16.2, p=.00) were reasons to not hire female employees. Among male-owned companies 1 percent said that a women’s family responsibilities and regulations regarding women’s working time were reasons to not hire female candidates, and 9 percent considered lack of competencies as reasons to not hire such candidates. In addition, 8 percent male-owned companies and 0,30.3 percent female-owned companies in manufacturing declared that family responsibilities and regulations pertaining to women were motives to not employ women. 90 Moldavija INDD Final.indd 90 16-Mar-18 10:23:02 AM CHAPTER 9: BUSINESS ENVIRONMENT This chapter evaluates entrepreneurs’ perception as to the favorableness of the business environment in Moldova. Companies that are more likely to evaluate the business environment as unfavorable are also described. The major obstacles to business are identified, and significant differences as to the likelihood of invoking an obstacle by a certain category of companies are presented. A. Perception of the Business Environment Generally female-owned businesses are less likely than male-owned businesses to claim that the business environment is favorable (Figure 9.1). Thus, while 13 percent of male-owned enterprises find the business environment favorable, just 3 percent% of female-owned businesses declared the same. In fact, 51 percent of female-owned businesses perceive the environment as unfavorable and another 46 percent find it neutral. Female-owned SME’s in retail, hotel/restaurant, other services but retail, wholesale and construction are the least likely to declare the business environment as favorable . In fact, 58 percent of retail businesses, 98 percent of hotel/restaurant businesses, and 77 percent of companies in other services declare that the business environment is unfavorable. Up to 96 percent of female-owned companies in construction and wholesale say that the business environment is neutral. Among female-owned companies, companies in wholesale, construction, and manufacturing are the least likely to say that the business environment is unfavorable. Nonetheless, significantly more (about 23 percent) male-owned companies from these industries consider the business environment to be favorable. Furthermore, geographical differences were found. It appears that female-owned businesses in the north of the country struggle the most. The data shows that 89 percent of companies considered the business environment to be unfavorable and just 2 percent found it to be favorable. In the center region, 67 percent female-owned companies found business conditions to be neutral and 6 percent found them to be favorable. Figure 9.1: Perception of the Business Environment, Type of Company, % Female -owned Male-owned Total, N=4281 3 46 51 N=15905 13 57 30 Agriculture, N=308 11 28 61 N=1091 30 13 57 Manufacturing, N=528 13 45 42 N=1423 12 38 50 Retail trade, N=1357 0 43 58 N=4188 0 63 36 Industry Wholesale trade, N=773 0 87 13 N=94 20 39 41 Construction, N=211 1 96 3 N=3251 23 51 26 Hotel or restaurant, N=187 1 1 98 N=744 0 100 Other services, N=916 1 22 77 N=5114 15 78 7 Micro, N=2962 3 45 53 N=11885 16 66 19 Small, N=1160 2 53 46 N=3488 3 31 66 Size Medium, N=158 11 35 54 N=532 16 24 60 Chisinau, N=2628 2 53 46 N=9749 17 51 32 North, N=631 28 89 N=2313 4 59 37 Region Center, N=775 6 67 28 N=2921 11 69 20 South, N=247 5 13 83 N=921 2 73 26 Favourable Neutral Unfavourable Supporting Women’s Entrepreneurship in Moldova 91 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 91 16-Mar-18 10:23:02 AM B. Obstacles The most pressing issue for female-owned companies in conducting business are the tax rates, and 19 percent of female-owned companies declared that tax rates represent the biggest obstacle that prevents their business from developing (Table 9.1). Female- owned companies also report that political instability is an obstacle, with about 14 percent finding it a major obstacle. Meanwhile, male-owned companies (23 percent) appear to report a consensus that access to finance is a major obstacle. Furthermore, male- owned companies perceive tax rates (17 percent) and corruption (also 17 percent) as impediments to conducting business. In contrast to male-owned SME’s, just 13 percent female-owned SME’s also declare that access to finance is a major problem. Female-owned companies also said that corruption (10 percent) and an inadequately educated workforce (9 percent) are obstacles preventing the growth of their businesses. Tax rates was declared the greatest barrier to development in greater proportion by representatives of manufacturing (41 percent) and retail (35 percent). Female-owned companies in wholesale struggle because of customs and trade regulations (51 percent) while female-owned construction companies are limited by access to land. As well, female-owned companies in the hotel/restaurant industry find access to finance the greatest barrier. It should be mentioned that almost a quarter of SME’s in services other than retail, wholesale, construction and the hotel/restaurant business find that an impediment to development is an inadequately educated workforce. 92 Moldavija INDD Final.indd 92 16-Mar-18 10:23:02 AM Table 9.1: Perception of Obstacles to Conduct Business, Female-owned Companies, % Moldavija INDD Final.indd 93 Female-owned companies Industry Size Region Total Wholesale Hotel or Other Agriculture Manufacturing Retail trade Construction Micro Small Medium Chisinau North Center South trade restaurant services Tax rates 19 12 41 35 0 1 0 10 22 15 13 12 62 13 14 Political Instability 14 16 6 14 12 1 1 25 15 10 19 16 1 3 62 Customs and trade regulations 12 8 0 0 51 0 0 10 7 27 0 18 2 2 0 Acces to nance 13 25 13 8 12 1 49 10 16 6 4 8 9 33 6 A Review, Assessment, and Recommendations Corruption 10 5 7 7 12 47 1 10 4 25 14 12 2 14 1 Inadequately educated work force 9 5 15 0 0 2 49 21 8 11 18 9 16 5 3 Tax administration 3 7 3 7 0 0 0 0 4 1 9 0 4 14 0 Supporting Women’s Entrepreneurship in Moldova Acces to land 3 6 0 0 0 45 0 0 4 0 3 4 2 0 1 Crime, theft and disorder 5 5 0 14 0 0 0 0 7 1 0 7 0 0 4 Electricity 2 2 1 0 0 0 0 10 3 0 3 4 0 0 3 Courts 2 1 0 0 12 0 0 0 3 0 0 4 0 0 0 Supervisory authorities activity (sanitary 2 1 0 7 0 1 0 0 3 0 3 0 0 12 0 inspection, re inspection, etc.) Practices of competitors in the informal 2 4 6 1 0 1 0 2 1 1 12 1 1 3 4 sector Business licensing and permits 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 Labor regulations 0 3 0 0 0 0 0 0 0 1 0 0 0 1 1 Transport 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Don't know 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Does not apply 3 0 5 7 0 0 0 0 4 1 2 5 0 0 1 93 16-Mar-18 10:23:02 AM CHAPTER 10: BUSINESS-GOVERNMENT RELATIONS In this chapter, the interaction of business enterprises with governmental agencies is explored. First, information is presented on the average time spent by senior management on dealing with requirements imposed by government regulations. Differences in time spent on administrative requirements are analyzed for different categories of companies, and significant differences are presented. Data regarding the average number of times companies were inspected by fiscal agents, or by representatives of other regulatory agencies are presented. Significant differences in the number of inspections for different type of companies is discussed. In addition, the report presents information regarding companies that applied for a license, the duration of the application review process, and the presence of corruption in that process. A. Time Spent toon Dealing with Government Regulations On average, 14 percent% of the working time of top managers is spent on procedures imposed by government regulations (Figure 10.1). Female-owned companies spend statistically significantly more time on regulatory procedures than do male-owned companies (u=25697216, p=.00). Thus, top- managers of female-owned companies spend on average 15 percent of their time to dealing with procedures imposed by government legislation, while top- management of male-owned companies spend 14 percent of their time for the same purpose. Among female-owned companies, there are differences in the amount of time senior management from different industries allocate to deal with government procedures (F(6,17707)=222.0, p=.00). Thus, top- management of female-owned companies in retail, wholesale, and the hotel/restaurant industry spend from 12 percent to 21 percent of their time on procedures imposed by government regulations. Senior management of construction firms spend the least amount of time in dealing with such activities (about 11 percent of their time). Also, it appears that the top management of companies in the center regions spend about a quarter of their time dealing with requirements imposed by regulations, while 16 percent of this time is spent by top- managers in the capital and about 9 percent of top- management time is spent in the North and South. Figure 10.1: Amount of Top- management Time Spent on Procedures Imposed by Government Regulations, % Female - owned companies Male - owned companies Total, N=302 15 N=1006 14 Agriculture, N=499 14 N=1400 11 Manufacturing, N=1354 16 N=3445 13 Retail trade, N=773 15 N=94 11 Wholesale trade, N=211 21 N=2508 13 Construction, N=185 11 N=744 12 Hotel or restaurant, N=824 12 N=4371 5 Other services, N=4149 11 N=13566 20 Micro, N=2848 13 N=9585 12 Small, N=1149 20 N=3465 19 Medium, N=151 18 N=517 17 Chisinau, N=2510 16 N=7519 13 North, N=616 10 N=2228 9 Center, N=775 18 N=2898 25 South, N=247 8 N=921 5 94 Moldavija INDD Final.indd 94 16-Mar-18 10:23:02 AM B. Fiscal Inspection In 2016, 45 percent of all companies were inspected by fiscal agents, including. 53 percent of female-owned companies and 43 percent of male-owned companies (Figure10.2). Female-owned companies were inspected by fiscal agents significantly more than male-owned companies (x2(1)=132.5, p=.00). Variation in the incidence of fiscal inspections being reported is perceived at the regional level. Thus, female-owned companies in the center and north of the country were more likely than companies in any other regions to report fiscal inspections in the course of 2016. The data show that 71 percent of female-owned companies in the North and 80 percent in the Center reported fiscal checks in 2016. In contrast just 18 percent of female-owned companies in the South and 44 percent of female-owned companies in the capital also were visited by fiscal agents. For female-owned retailers, 83 percent were visited by fiscal agents, while 2 percent to 58 percent of companies from other sectors had been also inspected. The average number of times companies were inspected was once, although, female-owned small and medium-sized companies that were inspected were more likely to be visited twice by fiscal agents. Female-owned companies in Chisinau were also on average visited twice. Figure 10.2: Incidence over the Last Year, of Establishment being Visited or Inspected by Tax Officials, Type of Company, %, Number Female - owned companies Male - owned companies Incidence of Nr. of visits Incidence of Nr. of visits scal checks scal checks Total, N=4281 53 47 0 N=15905 43 57 0 1 1 Agriculture, N=308 58 42 0 N=1091 49 51 0 2 1 Manufacturing, N=528 52 48 0 N=1423 36 64 0 1 2 Retail trade, N=1357 83 17 0 N=4188 55 46 0 2 1 Industry Wholesale trade, N=773 37 64 0 N=94 41 39 20 3 2 Construction, N=211 4 96 0 N=3251 1 99 0 2 2 Hotel or restaurant, N=187 2 98 0 N=744 100 0 1 2 Other services, N=916 43 57 0 N=5114 54 46 0 1 1 Micro, N=2962 60 40 0 N=11885 47 53 0 1 1 Small, N=1160 37 63 0 Size 2 N=3488 28 72 0 2 Medium, N=158 48 52 0 N=532 52 44 4 2 2 Chisinau, N=2628 44 56 0 N=9749 36 64 0 1 2 North, N=631 71 29 0 Region 1 N=2313 87 13 0 1 Center, N=775 80 20 0 1 N=2921 18 82 0 3 South, N=247 18 82 0 1 N=921 93 80 2 Yes No Don't know Female-owned companies are significantly more likely than male-owned companies to declare that informal gifts or payments were expected during fiscal inspections (x2(1)=998.9, p=.00) (Figure 10.3). In fact, 13 percent of female-owned companies that were visited by fiscal agents in 2016 claimed that such informal payments were expected of them. More female-owned companies in the services industries declared that gifts or payments were necessary during inspections. Thus, 66 percent of firms in wholesale, 39 percent of firms in the hotel/restaurant business, and 8 percent of firms in retail, and 7percent of firms in manufacturing that were inspected by fiscal agents in 2016 mentioned that gifts or payments were expected of them. Micro-sized female-owned companies declared that corruption was expected of them 17 percent of the time, while 2 percent to 6 percent of small and medium companies declared the same. Geographically, it appears that 16 percent of female-owned firms in Chisinau and 18 percent of female-owned enterprises in the center region were asked for informal gifts, while 1 percent of firms in the North and 4 percent of companies in the South declared the same. Supporting Women’s Entrepreneurship in Moldova 95 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 95 16-Mar-18 10:23:03 AM Figure 10.3: Incidence during any inspections by tax officials or meetings of a Gift or Informal Payment Expected or Requested, Type of Company, % Female - owned companies Male - owned companies Total, N=2269 13 78 80 N=6883 100 0 Agriculture, N=178 2 95 03 N=533 100 0 Manufacturing, N=277 7 93 0 N=518 97 03 Retail trade, N=1123 8 92 0 N=2284 100 0 Industry Wholesale trade, N=282 66 34 1 0 N=39 100 0 Construction, N=9 0 100 0 N=19 100 0 Hotel or restaurant, N=4 39 61 0 N=744 100 0 Other services, N=395 0 53 47 0 N=2748 100 0 Micro, N=1767 17 78 50 N=5633 100 0 Small, N=427 2 75 N=972 100 0 Size 22 1 Medium, N=75 6 94 N=278 3 91 06 0 N=3489 100 0 Chisinau, N=1156 16 68 16 0 N=2011 99 1 0 North, N=450 1 98 0 1 Region N=531 100 0 Center, N=619 18 82 0 N=852 1 99 0 South, N=44 4 96 0 Yes No Don't know Refusal C. Other Inspections In addition to fiscal inspections, 62 percent of all companies were inspected by state authorities other than fiscal agents during the course of 2016 (Figure 10.4). Of female-owned companies, 67 percent reported checks by such authorities, and 62 percent of male-owned companies had them as well. Female-owned companies are more likely than male-owned companies to become inspected (x2(1)=45.5, p=.00). Female-owned companies in retail and agriculture reported a higher incidence of inspections than female-owned companies in other sectors. Thus, all female-owned companies in retail and 79 percent of companies in agriculture had been visited by other state inspections offices in addition to but the fiscal agencies. Figure 10.4: Incidence over the last year of Establishments being Visited or Inspected by Other Regulatory authorities (Sanitary Inspection, Quality Inspection, Fire iInspection, and so forth, etc), %, Number Female - owned companies Male - owned companies Other inspections Nr. of visits Other inspections Nr. of visits but scal but scal Total, N=4281 67 33 0 2 N=15905 62 38 0 2 Agriculture, N=308 79 21 0 2 N=1091 80 17 3 2 Manufacturing, N=528 63 37 0 2 N=1423 78 22 0 1 Retail trade, N=1357 100 0 2 N=4188 82 18 0 1 Industry Wholesale trade, N=773 13 87 0 1 N=94 39 41 20 3 Construction, N=211 53 47 0 1 N=3251 28 72 0 2 Hotel or restaurant, N=187 51 49 0 1 N=744 100 0 5 Other services, N=916 68 32 0 1 N=5114 54 47 0 2 Micro, N=2962 64 36 0 1 N=11885 50 50 0 2 Small, N=1160 71 29 0 2 1 Size N=3488 98 1 1 Medium, N=158 86 14 0 3 2 N=532 86 11 4 Chisinau, N=2628 50 50 0 2 2 N=9749 44 56 0 North, N=631 94 60 1 1 Region N=2313 92 61 Center, N=775 92 90 1 2 N=2921 89 110 South, N=247 97 30 2 2 N=921 94 60 Yes No Don't know 96 Moldavija INDD Final.indd 96 16-Mar-18 10:23:03 AM In addition, female-owned companies in provincial Moldova were more likely to be inspected by other authorities than female-owned companies in the capital. While 50 percent of female-owned companies in Chisinau reported checks by these other authorities, 92 percent to 97 percent of female- owned companies in other regions of the country have had at least one such inspection. On average, companies were visited by other authorities twice. Female-owned companies in the hotel/restaurant industry reported inspections on average once per year. In addition, the number of inspections appears to grows withincrease based on the size of company. Female-owned micro enterprises declared on average one visit by other authorities, while medium enterprises reported three such visits. The data shows that 3 percent of all companies declared that informal payments or gifts were expected of them during inspections by regulatory authorities (Figure 10.5). Of female-owned companies, 8 percent said they were requested to make informal payments or gifts, while just 2 percent of male-owned companies received those requests Thus, female-owned companies were statistically significantly more likely to have been expected to offer informal payments to regulatory authorities than male-owned companies (x2(1)=420.9, p=.00). This included 7 percent of female-owned companies in retail, 15 percent of companies in other services (except retail, wholesale, construction, and the hotel/restaurant business) and 7 percent% of companies in the retail trade business. In the center of the country, 15 percent of female-owned companies said they were expected to offer informal gifts, while 1 percent of companies in the North and 3 percent in the South mentioned the same. In the capital, 8 percent of female-owned companies claimed they were requested to make informal payments. Figure 10.5: Incidence In any Inspections by Other Authorities or Meetings of a Gift or Informal Payment Expected or Requested, Type of cCompany, % Female - owned companies Male - owned companies Total, N=2859 8 89 4 0 N=9845 2 98 00 Agriculture, N=243 6 91 3 0 N=873 0 98 20 Manufacturing, N=334 4 95 01 N=1109 15 81 22 Retail trade, N=1354 Industry 7 93 00 N=3445 0 100 00 Wholesale trade, N=102 0 100 00 N=37 0 100 00 Construction, N=111 0 98 0 2 N=903 0 100 00 Hotel or restaurant, N=95 2 98 00 N=744 0 100 00 Other services, N=621 15 70 15 N=2735 0 100 00 Micro, N=1904 10 89 0 N=5964 3 98 00 Small, N=819 2 87 11 0 N=3424 0 100 00 Size Medium, N=137 7 90 0 3 N=457 6 81 8 6 Chisinau, N=1316 8 85 7 0 N=4241 4 97 00 North, N=594 1 98 10 N=2134 1 98 11 Region Center, N=709 15 85 0 N=2600 0 99 10 South, N=240 3 97 0 N=870 1 98 01 Yes No Don't know Refusal D. Licensing The data shows that 13 percent of all companies applied for a license since 2014 (Figure10.6). Just 0.5 percent of female-owned companies applied for a license while 16 percent of male-owned companies have applied. Of female-owned manufacturing companies, 1.7 percent applied for a license, and 4 percent of female-owned companies in construction have also applied. Of male-owned manufacturing businesses, 6.5 percent applied for a license and as did 25 percent of male-owned construction firms. Also, while 0.3 percent of female- owned service providers in businesses other than retail, wholesale, construction, and the hotel/restaurant industry applied for a license, 32 percent% of male-owned companies in the same sector have applied. Companies that applied for an operations license waited an average of 13 days to receive it. Construction companies waited less time, about three days, for the document, while manufacturing firms received the license after seven days. Supporting Women’s Entrepreneurship in Moldova 97 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 97 16-Mar-18 10:23:03 AM Figure 10.6: Incidence over the Last Two Years, of Establishment Submitting an Application to Obtain an Operating License, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 1 100 0 N=15905 16 84 0 Agriculture, N=308 0 100 0 N=1091 0 100 0 Manufacturing, N=528 2 98 0 N=1423 7 94 0 Retail trade, N=1357 0 100 0 N=4188 0 100 0 Industry Wholesale trade, N=773 0 100 0 N=94 0 100 0 Construction, N=211 4 96 0 N=3251 25 75 0 Hotel or restaurant, N=187 0 100 0 N=744 0 100 0 Other services, N=916 0 100 0 N=5114 32 68 0 Micro, N=2962 0 100 0 N=11885 21 79 0 Small, N=1160 0 100 0 N=3488 0 100 0 Size Medium, N=158 13 87 0 N=532 10 90 0 Chisinau, N=2628 0 100 0 N=9749 16 84 0 North, N=631 2 98 0 N=2313 4 96 0 Region Center, N=775 1 99 0 N=2921 30 70 0 South, N=247 0 100 0 N=921 1 99 0 Yes No Don't know The vast majority of companies that applied for a license were not expected to provide informal payments or gifts. Nonetheless, one service provider-a medium-sized transportation company - claimed that such a request was expected of it. 98 Moldavija INDD Final.indd 98 16-Mar-18 10:23:03 AM CHAPTER 11: NETWORKING This chapter displays main findings regarding firms’ affiliations with business or professional associations, as well as enterprises’ use of social networking. Specifically, it examines aspects related to the use of membership in order to find suppliers or clients, or to receive professional advice or mentorship, as well as the frequency of participation in events. A. Membership in Business or Professional Associations For the duration of 2016, 11 percent of firms were affiliated with at least a business or professional association (Figure 11.1). It appears that female-owned businesses in agriculture and in manufacturing are more active than male-owned businesses(x2 (1)>11.2 ,p<.01). A further regression analysis showed that membership in associations is predicted by the size of the company and the region the company is from. Thus, female-owned companies from the north and the south of the country are more likely to be part of business associations than female-owned companies from the Center and the capital. In addition, up to 57 percent of medium female-owned companies are part of business associations, while just 20 percent of small and 5 percent of micro female-owned companies also take part in associations. In contrast, 37 percent of small male-owned companies are part of business associations. Figure 11.1: Incidence in 2016, of Establishment Belonging to a Business Association, Chamber of Commerce, or Other Professional Associations, Type of Company, % Female - owned companies Male - owned companies Total, N=4281 11 89 N=15905 11 89 Agriculture, N=308 40 60 N=1091 20 80 Manufacturing, N=528 18 82 N=1423 12 88 Retail trade, N=1357 3 97 N=4188 0 100 Industry Wholesale trade, N=773 13 87 N=94 61 39 Construction, N=211 5 95 N=3251 27 73 Hotel or restaurant, N=187 50 50 N=744 0 100 Other services, N=916 1 99 N=5114 7 93 Micro, N=2962 5 95 N=11885 1 99 Small, N=1160 20 80 N=3488 37 63 Size Medium, N=158 57 43 N=532 42 58 Chisinau, N=2628 6 94 N=9749 1 99 North, N=631 28 72 N=2313 27 73 Region Center, N=775 10 90 N=2921 34 66 South, N=247 27 73 N=921 0 100 Yes No Don't know In 2016, of companies that were members of business or professional associations, 86 percent have used their status to get advice or mentoring. The data reveals that 43 percent of companies have used their membership in order to reach or conduct business with suppliers, and 84 percent used their membership to reach customers. Marginally significantly, more female-owned companies than male-owned companies used their membership to reach out to suppliers (x2(1)=03, p=.05). Thus, while 59 percent of female-owned companies benefited from their status to connect with suppliers (Figure 11.2), 39 percent of male-owned companies also did (Figure 11.3). Nonetheless, male-owned companies are statistically significantly more likely to benefit from membership in business or professional associations to connect with customers (x2(1)=6.8, p=..00), or to receive mentorship or advice (x2(1)=3.5, p=.06), than female-owned companies. However, it appears that most female-owned companies in the North of the country benefitted from their membership in aone way or another. For instance, 93 percent %of female-owned companies reached suppliers through membership in associations, while just 20 percent of female-owned companies in the capital did the same. In addition, the data shows that female-owned companies in agriculture, manufacturing, construction, the hotel/restaurant business, and other services but retail and wholesale contacted suppliers through business associations on a larger scale than female-owned companies in retail and wholesale. Micro companies are significantly less likely to contact suppliers through associations, in contrast to small and medium female-owned companies. While just 18 percent of micro female- owned companies declared having contacted suppliers through associations, 76 percent of small and 83 percent of medium female-owned companies did the same. Supporting Women’s Entrepreneurship in Moldova 99 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 99 16-Mar-18 10:23:03 AM Figure 11.2: Incidence in 2016, of Using your Membership in these Associations for Business Female-owned Firms, % Advice / mentoring To reach / contact suppliers To reach / customers Total, N=469 55 45 59 41 58 42 Agriculture, N=122 68 32 78 22 76 24 Manufacturing, N=97 72 28 69 31 68 32 Retail trade, N=38 0 100 0 100 0 100 Industry Wholesale trade, N=97 5 95 5 95 5 95 Construction, N=11 60 41 79 21 100 0 Hotel or restaurant, N=93 97 3 100 0 100 0 Other services, N=9 47 53 74 27 47 53 Micro, N=150 21 79 18 82 18 82 Small, N=228 71 29 76 24 75 25 Size Medium, N=91 73 27 83 17 82 18 Chisinau, N=150 23 78 20 80 16 84 North, N=174 87 13 93 7 93 7 Region Center, N=78 62 38 73 27 77 23 South, N=68 40 61 40 61 40 61 Yes No Regarding female businesses, it can be noted that in the Nnorth of the country many companies (93 percent) used their membership in business associations to reach customers, while just 16 percent of companies in Chisinau used their association membership status in a similar manner. As in the case of suppliers, female-owned companies in retail and wholesale do not use their membership as much as businesses in manufacturing or agriculture, a phenomenon that appears among female-owned companies and not as much among male-owned companies. Patterns similar to ones noted previously are present with respect to the activities of female-owned companies in relation to advice and mentoring offered by business and professional associations. Figure 11.3: Incidence in 2016, of Using your Membership in these Associations for Business Male-owned Firms, % Advice / mentoring To reach / contact suppliers To reach / customers Total, N=1701 94 6 39 62 92 9 Agriculture, N=222 86 14 58 43 58 43 Manufacturing, N=177 82 18 72 28 82 18 Retail trade, N=19 0 100 0 100 0 100 Industry Wholesale trade, N=57 65 35 68 33 100 0 Construction, N=884 100 0 2 98 100 0 Hotel or restaurant, N=0 0 0 0 Other services, N=342 100 0 100 0 100 0 Micro, N=175 100 0 100 0 100 0 Small, N=1302 98 2 26 74 93 7 Size Medium, N=224 69 31 62 39 78 23 Chisinau, N=103 68 32 50 50 68 32 North, N=615 92 8 79 21 82 18 Region Center, N=983 98 2 12 88 100 0 South, N=0 0 0 0 Yes No During 2016, representatives of companies that are members of business associations attended on average two events organized by these associations. Representatives of female-owned companies attended events organized by business and professional organizations more often than those of male- owned companies (u=370869.5, p=.02). Thus, on average representatives of female- owned companies attended association events three times during 2016, while representatives of male- owned companies attended two events on average. Representatives of female-owned companies in agriculture and manufacturing attended events on average four times (Figure 11.4). Among female-owned companies, representatives of medium-sized enterprises attended events more often (on average 4 times/year). Representatives of Ffemale-owned companies from provincial Moldova attended on average 3 events over the course of 2016, while those from companies in Chisinau, on average twice. 100 Moldavija INDD Final.indd 100 16-Mar-18 10:23:04 AM Figure 11.4: Frequency of Attending Events Organized by Business Associations, Type of Company, Number of Times Total, N=2170 2 -3 Agriculture, N=345 2 -4 Manufacturing, N=275 3 -4 Retail trade, N=57 02 Industry Wholesale trade, N=154 0 3 Construction, N=896 -3 1 Hotel or restaurant, N=93 -3 0 Other services, N=351 -3 6 Micro, N=326 -2 2 Small, N=1530 -2 2 Size Medium, N=315 -4 3 Chisinau, N=253 -2 4 North, N=789 -3 4 Region Center, N=1061 -3 1 South, N=68 -3 Female-owned Male-owned B. Social Networking The data shows that 59 percent of entrepreneurs use social networking tools to connect with other business people (Figure 11.5). Many top- managers (54 percent) connect with other entrepreneurs by social networking, although 74 percent of female top- managers declared they use social networking to connect with entrepreneurs. More female top- managers use social networking tools than do male top managers (x2(1)=532.0, p=.00). Fewer women in wholesale and other services but retail, wholesale business use social networking tools to connect to other entrepreneurs than do women in other industries. Thus, while 61 percent of women in wholesale and 64 percent of women in other services declared using social networks to connect with other entrepreneurs, overmore than 75 percent of female entrepreneurs in other sectors declared the same. In the center of Moldova, 70 percent of female entrepreneurs use social networks for business, while 72 percent use them in the capital, 42 percent in the South and 97 percent in the North. Figure 11.5. Incidence of Using Social Networks to Connect with Other Entrepreneurs, Gender, % Female - owned companies Male - owned companies Total, N=4281 74 26 N=15905 54 46 Agriculture, N=308 80 20 N=1091 48 52 Manufacturing, N=528 75 25 N=1423 49 51 Retail trade, N=1357 78 22 N=4188 52 49 Industry Wholesale trade, N=773 61 39 N=94 80 20 Construction, N=211 100 0 N=3251 52 48 Hotel or restaurant, N=187 100 0 N=744 100 0 Other services, N=916 64 36 N=5114 54 46 Micro, N=2962 75 25 N=11885 43 57 Small, N=1160 70 31 Size N=3488 90 10 Medium, N=158 82 17 N=532 80 20 Chisinau, N=2628 72 28 N=9749 55 45 North, N=631 97 3 N=2313 32 68 Region Center, N=775 70 30 N=2921 57 43 South, N=247 42 58 N=921 93 7 Yes No Don't know Supporting Women’s Entrepreneurship in Moldova 101 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 101 16-Mar-18 10:23:04 AM CHAPTER 12: PERCEPTION OF FEMALE ENTREPRENEURSHIP Entrepreneurs’ perception of differences between women and men in business, particularly in regards to management of companies, are presented and analyzed in this chapter. Results are presented regarding the likelihood of the gender of the respondent to influencing the perception of differences between women and men in business. Factors that determine a respondent to be in favor of governmental support programs for female-owned companies, or know about such programs, are discussed. In addition, the factors that cause a respondent to uphold certain beliefs about the effectiveness of different methods to support women in business are analyzed. Nearly half (44 percent) of respondents believe that women- entrepreneurs possess different characteristics when compared to men (Figure 12.1). Women tend to agree with that statement significantly more than men (x2(1)=893.0, p=.00). While 57 percent of women agreed that business women are different from business men, 36 percent of men also agreed with that statement. Fewer proportions of women believe that female entrepreneurs differ from male entrepreneurs, including in construction (4 percent), wholesale (43 percent), and agriculture (47 percent). In contrast, almost all many women in the hotel/restaurant industry (50 percent), and agriculture (47 percent), and in other services (81 percent) think that female entrepreneurs have different characteristics than their male counterparts. It appears that more women from micro-sized enterprises than medium and small enterprises think that gender differences exist. In addition, from a geographical stand point, more women in the center of the country and fewer women in the capital think that women in business are different fromthan men in business. Figure 12.1: Incidence of Thinking that Women Entrepreneurs Possess Other Characteristics in Comparison with Men in Business, Gender, % Women Men Total, N=7305 57 41 3 N=12881 36 62 2 Agriculture, N=543 47 53 0 N=856 49 43 9 Manufacturing, N=792 71 29 0 N=1160 51 38 11 Retail trade, N=2546 39 58 4 N=2999 45 55 0 Industry Wholesale trade, N=693 43 57 0 N=174 11 88 1 Construction, N=121 4 94 2 N=3341 23 77 0 Hotel or restaurant, N=187 50 50 0 N=744 0 100 0 Other services, N=2424 81 16 4 N=3607 42 58 0 Micro, N=4566 76 20 4 N=10281 41 57 2 Small, N=2406 20 80 0 N=2242 Size 12 88 0 Medium, N=332 57 42 1 N=358 45 50 5 Chisinau, N=4395 48 50 2 N=7982 45 55 0 North, N=763 54 46 0 N=2181 10 86 4 Region Center, N=1723 80 15 6 N=1973 12 84 5 South, N=424 61 39 0 N=745 80 20 1 Yes No Don't know Generally, both genders somewhat agree that gender does not predispose to better conduct of business and to the level of the success of a business (Table 12.1). More than a half of respondents declared that they believe that gender does not matter in regards to all aspects of a business. There is more agreement that gender does not matter in regards to obtaining financing (61 percent) and exporting (60 percent). Fewer respondents (47 percent) agreed that gender does not matter in regards to production. Respondents declared that women are more successful in personnel management (38 percent), the search for business information (40 percent), innovation (32 percent) and networking (53 percent). Respondents agreedalso said that women are less successful than men in production (27 percent ). Looking just at the responses by women, they tend to say that gender does not matter when it comes to conducting business. Most women agree that gender does not matter in regards to obtaining financing (68 percent), the search for business information (46 percent), or production (45 percent). More women say that female entrepreneurs are more successful than male entrepreneurs in regards to networking (53 percent), personnel management (38 percent) and search for business information (48 percent). Fewer numbers of women believe that women are less successful than men, although, most of these (26 percent) believe that female entrepreneurs are less successful than male entrepreneurs at production. 102 Moldavija INDD Final.indd 102 16-Mar-18 10:23:04 AM Table 12.1 Opinion Regarding Level of Success of Female Entrepreneurs in Comparison with Male Entrepreneurs, Gender, % Gender does More Less Don't not matter successful successful know Total, Search for nance 61 23 17 0 N=20186 Growth of sales 53 31 17 0 Search for business information 53 40 7 0 Market development 54 31 14 2 Exporting 60 13 15 12 Innovation 54 34 11 1 Networking 51 36 11 3 Production 47 22 30 1 Personnel management 56 37 7 0 Other 0 0 0 100 Female, Search for nance 68 28 4 0 N=7305 Growth of sales 45 37 18 0 Search for business information 46 48 6 0 Market development 40 50 5 5 Exporting 56 14 7 24 Innovation 53 32 14 0 Networking 33 53 11 3 Production 45 27 26 1 Personnel management 48 38 14 0 Other 0 0 0 100 Male, Search for nance 57 19 24 0 N=12881 Growth of sales 57 27 16 0 Search for business information 57 36 8 0 Market development 61 21 18 0 Exporting 63 13 19 5 Innovation 54 36 9 2 Networking 61 26 11 3 Production 48 19 32 1 Personnel management 61 36 3 1 Other 0 0 0 100 The data shows that 50 percent% of respondents believe that female entrepreneurs need special attention from the government or public officials (Figure12.1). Significantly more women than men agreed that affirmative action is needed for female entrepreneurs in Moldova (x2(1)=809.2, p=.00). While 62 percent of female entrepreneurs claimed that female entrepreneurs should be supported by the government, only 43 percenr of male entrepreneurs said the same. In a similar manner, more female top- managers (50 percent) than male top- managers (43 percent) said that affirmative action is needed for female-owned companies. Both women and men in retail strongly agreed that female entrepreneurs need governmental support. Of women in retail, 81 percent believe that affirmative action is needed, while 57 percent of women in manufacturing and 45 percent in other services but retail, wholesale, construction, and the hotel/restaurant industry believe such a necessity exists. In addition, women from small- and medium- sized companies agree more with the need tofor support of women in business with 79 percent of female entrepreneurs from small firms and 72 percent of women from medium- sized companies claiming that affirmative action is needed. Regionally, a strong difference of opinion exists between female respondents from the North and the South and female respondents from the capital and the Center. Thus, while 64 percent of female entrepreneurs in the capital and 37 percent in the Center think that affirmative action is needed, 85 percent of female respondents in the North, and 96 percent in the South believe that female entrepreneurs should be assisted. The tendency is present also in the case of male entrepreneurs. Supporting Women’s Entrepreneurship in Moldova 103 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 103 16-Mar-18 10:23:04 AM Figure 12.2: Incidence of Thinking that Female Enterprises Need Special Attention of the Government and Local Official, Gender, % Women Men Total, N=7305 62 37 2 N=12881 43 50 7 Agriculture, N=543 75 25 0 N=856 75 17 9 Manufacturing, N=792 57 41 3 N=1160 62 33 6 Retail trade, N=2546 81 15 4 N=2999 96 40 Industry Wholesale trade, N=693 71 29 0 N=174 76 22 1 Construction, N=121 23 77 0 N=3341 2 76 22 Hotel or restaurant, N=187 1 99 0 N=744 0 100 0 Other services, N=2424 45 55 0 N=3607 30 70 0 Micro, N=4566 52 48 0 N=10281 43 50 8 Small, N=2406 79 18 4 N=2242 Size 45 52 3 Medium, N=332 72 21 7 N=358 34 64 2 Chisinau, N=4395 64 33 2 N=7982 26 64 10 North, N=763 85 15 0 N=2181 88 9 3 Region Center, N=1723 37 62 1 N=1973 42 59 0 South, N=424 96 40 N=745 97 1 2 Yes No Don't know According to the data, 17 percent of respondents know about governmental programs to support female entrepreneurship (Figure 12.3), but female and male respondents differ significantly in their level of awareness regarding these programs (x2(1)=61.4, p=.00). Of male respondents, 18 percent declared knowing of programs to support women, while 14 percent female respondents declared the same. Proportions of top- managers who know of government programs to assist female entrepreneurs differ 16 percent for male top- managers and 23 percent for female top- managers. More women in wholesale (40 percent) and the hotel/restaurant industry (49 percent) know of the existence of state support programs for women in business, as did about 38 percent of female entrepreneurs in agriculture. Female entrepreneurs from micro companies are more aware than female entrepreneurs from small and medium companies about the existence of such programs. In addition, female respondents from the capital and the Ccenter of the country appear more aware of state programs than female respondents from other regions. While 14 percent of female entrepreneurs in the Ccenter of the country and 16 percent of female entrepreneurs in the capital know of state programs for affirmative action, just up to 6 percent% of female respondents from other regions know of them. Figure 12.3: Incidence of Knowing any Government Initiatives to Support Female Enterprises, Gender, % Women Men Total, N=7305 14 86 0 N=12881 18 82 0 Agriculture, N=543 38 62 0 N=856 21 79 0 Manufacturing, N=792 19 81 0 N=1160 6 94 0 Retail trade, N=2546 7 93 0 N=2999 17 84 0 Industry Wholesale trade, N=693 40 60 0 N=174 54 44 1 Construction, N=121 2 98 0 N=3341 0 100 0 Hotel or restaurant, N=187 49 51 0 N=744 0 100 0 Other services, N=2424 4 96 0 N=3607 41 59 0 Micro, N=4566 16 84 0 N=10281 22 78 0 Small, N=2406 8 92 0 N=2242 Size 2 98 0 Medium, N=332 28 72 0 N=358 19 82 0 Chisinau, N=4395 16 84 0 N=7982 19 81 0 North, N=763 4 96 0 N=2181 3 97 0 Region Center, N=1723 14 86 0 N=1973 7 93 0 South, N=424 6 94 0 N=745 83 18 0 Yes No Don't know 104 Moldavija INDD Final.indd 104 16-Mar-18 10:23:05 AM Both women and men agreed that a less traditional attitude of the society towards female entrepreneurship will improve the development of female entrepreneurship (Table 12.2). Many respondents (82 percent) agreed that this will improve the situation of female-owned firms. Women agreed with this statement more than men – 89 percent of women agreed with the opinion andcompared to 78 percent of men. In addition, many respondents (80 percent) declared that female-owned companies would develop better if of government officials had a more positive attitude towards female entrepreneurship. Female entrepreneurs agreed with this statement more than did male entrepreneurs. In fact there was the most consensus on the part of female entrepreneurs in regards to this statement than with any other question – 92 percent of women think that a more positive attitude on the part of officials will improve the conditions for female-owned companies. In addition, 73 percent of women and men think that support programs designed specifically for women will also boost female entrepreneurship. Table 12.2: Agreement with Factors that would Stimulate the Development of Female Entrepreneurship, Gender, % Yes No Don't know Total, Improving legal regulations, with a focus on the selected groups 45 49 6 N=20186 Support programmes only for women 73 26 1 Positive attitude of officials towards female entrepreneurship 80 16 5 Less traditional attitude of society towards female entrepreneurship 82 13 6 Other 0 0 100 Female, Improving legal regulations, with a focus on the selected groups 62 36 2 N=7305 Support programmes only for women 78 20 2 Positive attitude of officials towards female entrepreneurship 92 8 1 Less traditional attitude of society towards female entrepreneurship 89 7 5 Other 0 0 100 Male, Improving legal regulations, with a focus on the selected groups 36 56 8 N=12881 Support programmes only for women 71 29 0 Positive attitude of officials towards female entrepreneurship 72 20 7 Less traditional attitude of society towards female entrepreneurship 78 16 6 Other 0 0 100 Supporting Women’s Entrepreneurship in Moldova 105 A Review, Assessment, and Recommendations Moldavija INDD Final.indd 105 16-Mar-18 10:23:05 AM 106 APPENDICES Moldavija INDD Final.indd 106 Appendix A.1: Mean, Median, Lower Quartile and Upper Quartile Values for Sales of Enterprises, MDL Total Female-owned Male-owned Lower Upper Lower Upper Lower Upper Mean Median Mean Median Mean Median quartile quartile quartile quartile quartile quartile Total, N=18603 3175575 720000 200000 2000000 3618718 1004249 350000 3000000 3261259 720000 200000 2000000 Agriculture, N=1343 5471302 500000 200000 4000000 7132553 2800000 430000 6000000 4995293 500000 200000 2700000 Manufacturing, N=1833 5218254 1500000 500000 4000000 3359130 1200000 500000 3000000 5778126 2000000 250000 5000000 Retail trade, N=5339 2599906 370000 200000 2000000 1884348 370000 300000 1400000 2800558 1700000 200000 2000000 Industry Wholesale trade, N=711 16092140 8000000 1123407 8000000 5985489 8000000 1123407 8000000 200000000 200000000 200000000 200000000 Construction, N=2716 2736962 90000 30000 3000000 5109553 1150000 1000000 1150000 2539387 90000 30000 3000000 Hotel or restaurant, N=928 1790488 720000 720000 720000 6094014 9000000 3000000 9000000 720000 720000 720000 720000 Other services, N=5732 1628420 660000 200000 1900000 1611260 350000 200000 645972 1630563 660000 200000 1900000 Micro, N=13648 1032269 300000 100000 1500000 1240466 370000 300000 1123407 985427 200000 90000 1500000 Size Small, N=4406 4857014 3000000 2000000 8000000 6794061 8000000 3000000 9000000 4325063 3000000 2000000 4000000 Medium, N=549 45856959 20000000 6300000 45000000 24520667 18000000 6000000 35932007 53229180 30000000 6300000 88267000 Chisinau, N=10972 3253170 720000 200000 2000000 3892493 1123407 410000 8000000 3105803 720000 90000 2000000 North, N=2889 2906753 300000 200000 642727 3994867 370000 370000 6000000 2608142 200000 200000 642727 Region Center, N=3577 3279873 1200000 85000 3000000 2957091 1150000 100000 2000000 3354990 1200000 85000 3000000 South, N=1165 4158989 1700000 1230000 2700000 2186398 200000 200000 800000 4682258 1700000 1700000 3130491 16-Mar-18 10:23:05 AM Appendix A.2: Mean, Median, Lower Quartile and Upper Quartile Values for Amounts Spent on Acquisitions of Machinery, Vehicles or Equipment, MDL Moldavija INDD Final.indd 107 Total Female-owned Male-owned Lower Upper Lower Upper Lower Upper Mean Median Mean Median Mean Median quartile quartile quartile quartile quartile quartile Total, N=7805 589053 150000 100000 1000000 779961 200000 55000 1200000 559443 150000 100000 1000000 Agriculture, N=681 1612783 1400000 500000 2100000 1200013 800000 210000 2000000 1781422 2000000 770000 2100000 Manufacturing, N=799 449993 120000 70000 300000 267785 70000 50000 200000 487873 120000 70000 300000 Retail trade, N=2103 560297 1000000 6600 1000000 72451 60000 55000 60000 611184 1000000 6600 1000000 A Review, Assessment, and Recommendations Industry Wholesale trade, N=360 1128522 1200000 1200000 1200000 1206467 1200000 1200000 1200000 700950 500000 500000 1102850 Construction, N=1691 739353 1100000 100000 1100000 11951571 2500000 200000 4000000 662600 1100000 100000 1100000 Supporting Women’s Entrepreneurship in Moldova Hotel or restaurant, N=0 . . . . . . . . . . . . Other services, N=2171 140518 150000 150000 150000 121658 34000 33000 34000 142412 150000 150000 150000 Micro, N=4154 198902 100000 50000 150000 81593 35984 33000 60000 211087 120000 70000 150000 Size Small, N=3204 892860 1000000 1000000 1100000 897585 1200000 170000 1200000 891871 1000000 1000000 1100000 Medium, N=447 2035386 1200000 500000 3000000 2795584 651000 400000 3000000 1807797 1200000 500000 3000000 Chisinau, N=4376 481077 150000 90000 1000000 780384 90000 34000 1200000 424490 150000 100000 1000000 North, N=828 449343 60000 60000 200000 1222746 680000 210000 1400000 337137 60000 60000 90000 Region Center, N=2361 757003 600000 150000 1100000 429418 60000 60000 272800 787071 1100000 150000 1100000 South, N=240 1388824 800000 200000 1400000 1247046 800000 300000 2000000 1425050 800000 200000 1400000 107 16-Mar-18 10:23:05 AM 108 Appendix A.3: Mean, Median, Lower Quartile and Upper Quartile Values for Amounts Spent on Acquisitions of Land and Buildings, MDL Total Female-owned Male-owned Moldavija INDD Final.indd 108 Lower Upper Lower Upper Lower Upper Mean Median Mean Median Mean Median quartile quartile quartile quartile quartile quartile Total, N=3849 32471 0 0 0 146628 0 0 0 19178 0 0 0 Agriculture, N=554 182440 0 0 0 329683 0 0 0 143571 0 0 0 Manufacturing, N=504 12727 0 0 0 37444 0 0 0 7733 0 0 0 Retail trade, N=841 0 0 0 0 0 0 0 0 0 0 0 0 Industry Wholesale trade, N=40 0 0 0 0 0 0 0 0 0 0 0 0 Construction, N=938 0 0 0 0 0 0 0 0 0 0 0 0 Hotel or restaurant, N=2 0 0 0 0 0 0 0 0 . . . . Other services, N=971 18117 0 0 0 181498 0 0 0 0 0 0 0 Micro, N=2327 0 0 0 0 0 0 0 0 0 0 0 0 Size Small, N=1292 53305 0 0 0 13966 0 0 0 60335 0 0 0 Medium, N=231 243216 0 0 0 903970 0 0 0 0 0 0 0 Chisinau, N=1204 2635 0 0 0 12329 0 0 0 0 0 0 0 North, N=338 249997 0 0 0 337840 0 0 0 229461 0 0 0 Region Center, N=2102 17740 0 0 0 644385 0 0 0 1583 0 0 0 South, N=204 0 0 0 0 0 0 0 0 0 0 0 0 16-Mar-18 10:23:06 AM Moldavija INDD Final.indd 109 16-Mar-18 10:23:07 AM 110 Moldavija INDD Final.indd 110 16-Mar-18 10:23:07 AM