Gender and Innovativeness of Small and Medium Enterprises: The Case of Transition Countries

Small and Medium Enterprises (SMEs) roles are rising over the last decades, and their innovativeness is vital for competitive advantages and sustainable development of the economy in general. Little knowledge exists on the difference in innovation behavior of men and women leading SMEs in transition countries. Using the firm-level data from 30 countries in transition that took part in the 5th Wave of BEEPS survey (2013), this paper estimates whether there is a gender gap in the innovation actions of the SMEs leaders. The results show that the propensity to innovate is higher among female owners, and this finding preserves for four different measures of innovativeness. Thus, female involvement in business might be beneficial for the innovative and sustainable development of an economy. Estimation of the gap in efficiency of implemented innovations did not reveal any strong prevailing gender in terms of effectiveness, and it depends on the type of proxy for innovativeness as well as an indicator of SME’s performance.