Difficulties facing women entrepreneurs in Israel: a social stratification approach

Difficulties facing womenentrepreneurs in Israel:

a social stratification approachSibylle Heilbrunn

School of Social and Community Sciences,Ruppin Academic Center, Emek Hefer, Israel

Khaled Abu-AsbehDepartment of Education, Beit Berl College, Beit Berl, Israel, and

Muhammed Abu NasraDepartment of Sociology and Anthropology,

Hebrew University, Jerusalem, Israel

Abstract

Purpose – The purpose of this article is to explore the difficulties facing entrepreneurs in three groupsof women in Israel: immigrant women from the Former Soviet Union (FSU), women belonging to thePalestinian Israeli minority and Jewish Israeli women belonging to the majority population. Relying onthe stratification approach, the authors investigate the extent to which labor market, resource andwomen-specific disadvantages constrain women’s entrepreneurship within these three groups.

Design/methodology/approach – The target research population consisted of 477 womenentrepreneurs who operated businesses between 2009 and 2010. Using systematic sampling, theauthors surveyed 148 FSU immigrant women business owners, 150 Jewish Israeli women businessowners and 170 Palestinian Israeli women business owners, using a comprehensive questionnaireadministered in the entrepreneurs’ native language.

Findings – The authors found similarities and differences between the three groups as to their abilityto handle difficulties deriving from labor market, resource and women-specific disadvantages. Overall,the authors found that Palestinian women entrepreneurs have relatively more difficulties than theother two groups.

Research limitations/implications – Women entrepreneurs’ socio-political status withinstratified social realities imposes constraints on their economic activities. Further research shouldinvestigate policies, which could assist in overcoming these constraints taking into considerationsimilarities and differences between specific groups.

Originality/value – In addition to shedding light on the impact of socio-political environmentalcircumstances on women entrepreneurs in a particular country, the authors believe that applying thesocial stratification approach is especially valuable at the intersection of minority status, gender andentrepreneurship.

Keywords Gender, Israel, Entrepreneurship, Migrants, Minorities, Social stratification

Paper type Research paper

IntroductionThe phenomenon of entrepreneurship among migrant and minority groups has growingsignificance in assessing local economic development and social change.Entrepreneurship is a route of economic advancement and mobility for migrantsand minorities. At the same time, it adds to the economic development potential of local

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Received 4 February 2013Revised 2 June 201314 July 20135 December 2013Accepted 10 January 2014

International Journal of Gender andEntrepreneurshipVol. 6 No. 2, 2014pp. 142-162q Emerald Group Publishing Limited1756-6266DOI 10.1108/IJGE-02-2013-0007

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communities, and results in sustainable economic development (Lofstrom, 2002; Levittand Glick-Schiller, 2004; Portes and Yiu, 2013).

Global developments have caused major cultural changes, crystallizing new genderroles for women in the labor market (Ingelhart and Baker, 2000). Entrepreneurship alsoreflects these changes, as worldwide, the growth rate of female entrepreneurs is fasterthan that of male entrepreneurship (Miniti and Naude, 2010).

The growth of women’s entrepreneurship has led to a growing need for cohesiveunderstanding of this phenomenon within the context of the social sciences, as reflectedin an increasing number of studies on this topic (Boyd, 2005; Bruni et al., 2004; Brush et al.,2006; Pines and Schwartz, 2008; Marlow et al., 2008; Pines et al., 2010; Azmat, 2013).

Within the framework of this study we investigated three groups of womenentrepreneurs in Israel: women business owners belonging to the Palestinian Israeliminority, Former Soviet Union (FSU) immigrant women entrepreneurs, and JewishIsraeli women entrepreneurs belonging to the dominant majority.

Previous research on the Israeli case has shown that in Israel, women own one half ofall immigrant businesses, whereas Israeli born Jewish women entrepreneurs own onlyone-third of native businesses. In 2008, 4.4 percent of entrepreneurs among the veteranJewish population were male, while 2.2 percent were female. Among immigrants fromthe FSU, 1.7 percent of men and 1.4 percent of women were entrepreneurs, whereasamong the Palestinian Israeli population, 2.1 percent of men and 0.6 percent of womenengaged in entrepreneurial undertakings (Menipaz et al., 2009). Thus, in 2008, the groupwith the lowest rate of entrepreneurship in Israel was Palestinian Israeli women. As forthe ratio between men and women entrepreneurs, the gap is widest among thePalestinian Israeli population. Whereas the ratios for the Jewish veteran population andimmigrants from the FSU are 0.50 and 0.82 (52 and 82 women per 100 menentrepreneurs), respectively, the ratio for the Palestinian Israeli population is 0.28(Menipaz et al., 2009). In addition, Pines et al. (2010) found differences between thesegroups in the relative percentage rate of total early stage entrepreneurial activity (TEA).According to their research on the 236,000 entrepreneurs who were engaged in TEAfrom early 2004 to late 2007, about 184,000 were Jewish veteran Israelis, while only25,000 were Palestinian Israelis. The percentage of women was smaller than that of men(29 in 100) (Pines et al., 2010).

Our study seeks to add an additional angle to the issue of female entrepreneurship byinvestigating three groups of women entrepreneurs: Jewish Israeli women, who belongto the dominant majority of Israeli society, women who immigrated to Israel from theFSU during the 1990s, and women members of the Palestinian minority in Israel.Taking into account that women operate in varying public and private environmentalcontexts, we attempt to investigate the impact of socio-political status resulting from thesocial stratification of women entrepreneurs on the barriers they encounter in theirentrepreneurial journey. Focusing on the intersection of social stratification andentrepreneurship highlights the fact that entrepreneurship takes place in the contextof the interplay of social forces. Thus, race, ethnicity, gender, religion, and othercharacteristics influence the process of entrepreneurship via opportunity structure andthe location of a specific group in the social stratification of society.

Following this introduction, we will explain the context of women in each of the threegroups. We then present our conceptual framework, followed by a description of ourmethodological approach. Finally, we present our findings and conclusions.

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The contextIsraeli society is characterized by multi-culturalism, since it is composed of many ethnicand national groups. At the same time, Israeli society is also highly stratified. Thepopulation of the State of Israel today stands at about 8.7 million people, with womencomprising 50 percent of the population. Jewish Israeli-born women are 38 percent of thepopulation, Palestinian Israeli women account for 10 percent, and immigrant womenfrom the FSU account for 14.8 percent (2012 Statistical Abstract of Israel, CBS). Table Idepicts selected data that describe the socio-economic situation, comparing the threegroups (Semyonov et al., 2010).

The data presented in Table I show substantial differences in socio-economic statusbetween the three groups, with the native Jewish Israeli population being strongest onthree parameters, followed by the FSU immigrants who rate highest when measuredby the parameters of education and employment. The Palestinian Israelis score lowestin all categories. Israeli society is stratified along national and religious lines, and in thefollowing section we explain the particularities of each of the two non-mainstreamgroups investigated in our paper.

Immigrants from the FSU comprise about 20 percent of the Jewish population inIsrael today; the massive wave of these immigrants arrived in Israel between 1989 and2000. They are fairly well integrated into Israeli society, based on the implementation ofthe principle of jus sanguinis, which restricts the eligibility of citizenship to members ofthe Jewish ethnic group (Gal, 2008). Once they arrive in Israel, FSU immigrants areincluded in the social welfare system and mainstream societal context, and haveintegrated well over the years in terms of education, labor market participation andpolitical involvement (Semyonov et al., 2010). Over 69 percent of all FSU immigrantshave at least some college education, whereas the percentage of college-educated amongnatives is only about 35 percent (HaCohen, 2002; Remennick, 2004). Thus, FSUimmigrants who came to Israel in the 1990s constitute a highly skilled group with richhuman assets as a major feature (HaCohen, 2002; Leshem and Sicron, 2004). The influx ofimmigrants from the FSU to Israel in the 1970s and 1990s has made this ethnic group thelargest in Israel. FSU immigrants wield significant influence over the country’seconomic, social and cultural life. Most importantly, they have become politically active,which has enabled them to become an integral partner in shaping the socio-economic

Data for 2008 FSU immigrants Palestinian IsraelisNative Jewish

Israelis

Average monthly income per capita (NIS) 3,222 1,522 3,603Weighted product consumptiona 39 32 50Percentage with higher education 37.9 11.2 32.05Percentage of unemployed 3.1 6.2 5.5Rate of employment in PTM occupations 32.1 24.5 44.2

Notes: a“This variable is calculated as the scarcity index wherein all the components receive a relativeweight in relation to the population distribution in the 2008 social survey; the rarer the product, thehigher the weight; the weights allotted to the different variables are: car – 0/639, internet – 0.421,computer – 0.622, trips in Israel – 0.51, trips abroad – 0.51; based on this formula, the maximum valuethat this variable can receive will be 2.492; the data presented are the average population percentagesfor each of the groups, from the total possible maximum” (Semyonov et al., 2010, p. 28)

Table I.Data comparison betweenFSU immigrants,Palestinian Israelis,and native JewishIsraeli citizens

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and political agenda. Thus, for example, their votes affect the course of Israeli publicpolicy and peace negotiations with the Palestinians (Canetti-Nisim et al., 2006).

The Palestinian Israelis are a distinct minority (Carmi and Rosenfeld, 1988;Kimmerling, 2004), separated from the Jewish majority by national identity, religion,language, and culture (Smooha, 1998; Yiftachel, 1992; Al-Haj, 1995). Schnell and Sofer(2002) overview the literature on Jewish-Arab relations in Israel, and state that followingKhalidi (1988), marginalization of the Arab population divides into four main aspects:discriminatory state policies (Khamaisi, 2003; Haider, 2005, 2009), a class structure thatdifferentiates among ethnic groups, cultural and social-structural gaps, and socio-spatialsegregation in the national periphery (Abu-Asbeh and Heilbrunn, 2011). Some researchershave shown that for years Israeli governments used ongoing discriminatory policiestowards the Palestinian Israeli population, especially with regard to resource distribution,as well as land and infrastructure distribution. In addition, gaps between the Jewish andthe Palestinian Israeli population increased in areas such as socio-economic status andeducation (Hasson and Karayanni, 2006; Hasson and Abu-Asbeh, 2006). According toHaider (2005), Israeli governments have acted purposely to prevent the development of thePalestinian Israeli economy via inadequate investment in infrastructure development,failure to establish industrial parks and zones, and lack of financial investment to fosterentrepreneurship in Palestinian Israeli settlements. This policy is aimed at increasing thedependency of the Palestinian Israeli population on the Jewish majority population, inorder to prevent the development of an autonomous Palestinian Israeli economy, whichwould have the power to compete with the Jewish market (Bauml, 2007). This policy hasdiminished the economic space for Palestinians in general and for women in particular. ForPalestinian Israeli women entrepreneurs, the structural economic reality is not the onlymajor barrier; they also have to confront socio-cultural barriers. Palestinian Israeli societyis characterized by a patriarchal structure, which restrains women’s development byfocusing on two traditional female roles: mother and wife (Haj Yechia-Abu Ahmad, 2006).Furthermore, cultural codes encourage separation between women and men who are notfamily members. In this context, Arar and Abu-Asbeh (2010) state that Palestinian Israeliwomen can engage in entrepreneurship only if they manage to successfully combine theirtraditional role as mother and wife with the role of business owner. Davidovich-Noam(2007) and Harrari-Kmr (2007) found that women who did not manage to combine the tworoles left the economic arena in order to focus on the family. Their studies also revealedthat Palestinian Israeli men have a considerable influence on the entrance of women intothe labor market. Thus, family and especially male support is crucial for the personal andprofessional development of Palestinian Israeli women. When starting businesses, malesupport is even more important, since the men of the family, and especially the husbands,are the main source of financing for the business (Harrari-Kmr, 2007).

Each of the groups investigated in our study has its own cultural, social andeconomic characteristics, as well as its own location within the social stratification ofIsraeli society.

Theoretical framework and hypotheses developmentMigrant and minority entrepreneurship have been discussed in the academic literaturein terms of structural push factors and cultural pull factors (Clark and Drinkwater, 2000).Kloosterman and Rath (2003) challenge this dichotomist approach and maintain thatthere is a mixed embeddedness of structural constraints and cultural aspects, with


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ethnic resources being mobilized within external constraints. Some researchers focus onthe intersection of a variety of aspects of the entrepreneurial process such as gender,ethnicity and class (Brettell, 2007; Robinson et al., 2007). This approach goes along withthe longstanding discussion of the sociological notion of stratification in society (Weber,1978; Davis and Moore, 1945; Tumin, 1953; Spilerman, 2000; Giddens, 2006; Marger,2010) suggesting that social stratification is the outcome of institutional processes thatpartition society into advantaged and disadvantaged socially constructed groups(Robinson et al., 2007). In modern society, the basis for social stratification can includegroupings by gender, race, ethnicity, religion, nationality, wealth and class. Emergingadvantages and/or disadvantages of groups are often reinforced by accumulation ofpower and resources by the advantaged group over time.

In the framework of this research we focus upon the intersection of gender, minorityand migrant status in the process of entrepreneurship, in order to compare three groupsof women entrepreneurs located at different socio-economic strata of Israeli society, andbelonging to different ethnic groups. Hiebert (2002) discusses the influence ofopportunity structure on the tendency to become self-employed, and maintains thatthere is a high correspondence between niches in which immigrants and minorities findwork and those in which they become self-employed. Bruni et al. (2004) explain thatentrepreneurship is embedded within economic, legal, normative and societalenvironments, and Jamali (2009) maintains that entrepreneurship is affected by acomplex combination of micro, meso, and macro variables. Thus, gender, class, andethnicity intersect in different ways and at different levels for ethnic groups, dependingon time and place.

Robinson et al. (2007) maintain that stratification meets entrepreneurship whereentrepreneurship is perceived as a means of social mobility, and where programs and/orsupport systems exist that are aimed at improving the situation of particular groups(often as an alternative to labor market entrance). Furthermore, the authors stress thefact that social stratification influences the entire entrepreneurial process, particularlyfor low-status groups. Assuming that social stratification according to race, ethnicity,gender or other characteristics, circumscribes the entrepreneurial process in general,and difficulties encountered by entrepreneurs in particular, we investigated threegroups of women entrepreneurs in Israel using the disadvantage approach.

Individuals and groups that are disadvantaged and the victims of discrimination oftenface resource constraints. Light and Rosenstein (1995) distinguish between “labor marketdisadvantage” resulting from racial, gender, or ethnic discrimination, which is notnecessarily related to the productivity of the group on the demand side, and “resourcedisadvantage” on the supply side. Minority and migrant women entrepreneurs often facewhat has been called the “double disadvantage” of racism and sexism (Jensen, 2010). Boyd(2000) found that the tendency of women to become entrepreneurs was positivelycorrelated with their level of disadvantage in the labor market. For minority women thiscorrelation was found to be stronger than for white women (Smith-Hunter and Boyd,2004). The work-family interface (Jennings et al., 2010) is an important aspect of femaleentrepreneurship, since it is related to the expectation that women should carry themajor load of family responsibility which is a typical barrier to women entrepreneurs(Baycan-Levent et al., 2003). Therefore, family support is a major asset for womenentrepreneurs (Shinnar et al., 2012; Heilbrunn and Davidovitch, 2011), and the lack of suchsupport constitutes an additional – women-specific – disadvantage.

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Subsequently, we developed our hypotheses focusing on resource, labor market andwomen-specific disadvantages of the three groups of women entrepreneursinvestigated in our study.

1. Labor market disadvantageLabor market disadvantage stems from un- or under-employment, illegal status, lack oflanguage proficiency, low educational qualifications (Valenzuela, 2001), and racism anddiscrimination (Lazaridis and Koumandraki, 2003). Researchers have often cited thedisadvantage theory to explain the fact that in many societies, minorities (and migrants)have high rates of business ownership (Cooper and Dunkelberg, 1987; Horton andDe Jong, 1991; Smith-Hunter and Boyd, 2004), due to segregated labor markets thatexclude minorities. While restricted opportunity structures in the labor market oftenpush women into self-employment, the same restrictions also constitute constraintswhen setting up a business (Heilbrunn, 2004; Jamali, 2009; Volery, 2007). Inman (1999)compared white and minority women, and discovered that minority women businessowners were more likely to have been motivated to start their businesses by their morelimited options in the mainstream labor market. Thus, considering the status of therespective groups in Israeli society, we expect that women belonging to the PalestinianIsraeli minority and those who immigrated to Israel from the FSU will have moredifficulties overcoming barriers related to laws and regulations than Jewish Israeliwomen belonging to the mainstream majority. Our first set of hypotheses concernsadministrative and regulatory barriers and market competition, which are forms oflabor market disadvantage:

H1.1. Palestinian Israeli women entrepreneurs will have more difficulties handlinglaws and regulations than immigrant and Jewish Israeli womenentrepreneurs.

H1.2. Immigrant women entrepreneurs will have more difficulties handling lawsand regulations than Jewish Israeli women entrepreneurs.

Since stratification often occurs along socio-economic and ethnic lines, labor marketdisadvantage also pushes minorities and migrants into the so-called ethnic economy(Hedberg and Pettersson, 2011). Entrepreneurship is then a response to structuraldiscrimination, while recruiting ethnic resources (Zhou, 2004) in terms of employees,customers and co-workers. The theory on “middlemen minorities” maintains that thestructural gap between majorities and minorities in the labor market creates apossibility for the self-employment of ethnic groups (Min and Bozorgmehr, 2000;Bonacich and Modell, 1980; Korpi et al., 2013) where they recruit ethnic resources andsolidarities in order to deal with competition, emphasizing the economic and socialimplications of these activities. Based on the context of the women entrepreneurs underinvestigation in Israel, we expect that Palestinian Israeli and immigrant women will dealbetter with market competition than their Jewish Israeli counterparts, since thebusinesses in the former category are mostly located in spatially segregated ethnicmarkets. This suggests a second set of hypotheses as follows:

H2.1. Palestinian Israeli women entrepreneurs will have fewer difficulties handlingcompetition than Jewish Israeli women entrepreneurs.


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H2.2. Immigrant women entrepreneurs will have fewer difficulties handlingcompetition than Jewish Israeli women entrepreneurs.

2. Resource disadvantageResource disadvantage occurs when a group attempting to enter the labor market hasfewer resources such as human capital, networks, and self-confidence (Light andRosenstein, 1995). Lack of access to finance and lack of management skills are formsof resource disadvantage. Some studies have shown that female entrepreneurs aredisadvantaged in terms of human capital because of a lack of education and lessexperience when compared with male entrepreneurs (Constant, 2004; Heilbrunn, 2004;Loscocco et al., 1991; Mirchandani, 2002). Most studies on women-owned businessesstress their smaller size in terms of number of employees and start-up capital thanbusinesses owned by men (Heilbrunn, 2004; Loscocco et al., 1991; Verheul et al., 2001).Carter and Marlow (2007) maintain that the greatest barriers to business formation andbusiness success for women in general are access to capital and the mobilization ofstart-up resources. Previous studies have also shown that immigrant and minoritywomen entrepreneurs encounter more barriers in ongoing business operation andmanagement than do native-born women. Immigrants and minorities have difficulties inobtaining initial capital (Inman, 1999; Constant, 2004; Pearce, 2005; Abbasian andYazdanfar, 2013), are confronted with barriers deriving from lack of adequate humancapital such as language, education and experience (Bates, 2002; Korpi et al., 2013), andlack of managerial skills (Heilbrunn et al., 2010). Inman (1999) found that when minoritywomen started their business, they had fewer financial options and greater difficulty inobtaining the resources needed to pursue their entrepreneurial goals than did their whitecounterparts (Smith-Hunter and Engelhardt, 2004). Consequently, we assume that in theIsraeli context migrant and minority women entrepreneurs will also have moredifficulties recruiting financial resources and handling management issues.Accordingly, this suggests a third and fourth set of hypotheses:

H3.1. Palestinian Israeli women entrepreneurs will have more difficulties inrecruiting capital than immigrant and Jewish Israeli women entrepreneurs.

H3.2. Immigrant women entrepreneurs will have more difficulties in recruitingcapital than Jewish Israeli women entrepreneurs.

H4.1. Palestinian Israeli women entrepreneurs will have more difficulties handlingmanagement issues than immigrant and Jewish Israeli women entrepreneurs.

H4.2. Immigrant women entrepreneurs will have more difficulties handlingmanagement issues than Jewish Israeli women entrepreneurs.

3. Women-specific disadvantageSome of the recent studies discussing immigrant and ethnic entrepreneurship specificallyfocus on women entrepreneurs (Constant, 2004; Smith-Hunter and Engelhardt, 2004;Pearce, 2005; Light, 2007). Immigrant and minority women encounter problems due totheir need to manage home responsibilities in addition to working outside the home(Collins, 2000), and the work-family conflict has been widely cited in Western literature asa constraint for women entrepreneurs (Jennings and McDouglas, 2007). The expectationthat the woman should carry the major load of family responsibility is a typical barrier

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to women entrepreneurs (Baycan-Levent et al., 2003). Therefore, family support is amajor asset for women entrepreneurs (Shinnar et al., 2012; Heilbrunn and Davidovitch,2011). Research in developed countries indicates that most work-family conflicts derivefrom lack of support by the entrepreneur’s husband. By contrast, in a number ofdeveloping countries, women enjoy a great deal of extended family support, which helpsthem confront the demands of an independent business as well as caring for their family(Joplin et al., 2003; Hill et al., 2004). We therefore expect that women entrepreneursbelonging to the Palestinian Israeli minority, characterized by a more traditional societalpattern, will have fewer problems with a lack of family support than women belonging tothe other two groups. Accordingly, our final hypothesis suggests the following:

H5. Palestinian Israeli women entrepreneurs will have more family support thanimmigrant and Jewish veteran women entrepreneurs.

MethodologyPopulationThe study consisted of 477 women entrepreneurs. The sampling frame was derived fromnine centers for promotion of entrepreneurship (CPE) throughout Israel: four in thecenter of the country, three in the north and two in the south. The CPEs were chosenbased on the representation rationale for the three groups of women entrepreneurs. Theinitial list provided by the CPEs included 2,110 women entrepreneurs. We randomlyselected every fourth phone number from the list thereby approaching 527 womenentrepreneurs. 427 agreed to participate in the research, thus the response rate was91 percent. Respondents provided information on demographic and business data,and on difficulties they dealt with while setting up the business.

Research instrumentA closed questionnaire was constructed specifically for this study. It was based onformer studies focusing on women’s entrepreneurship (Baycan-Levent et al., 2003;Hill et al., 2004; Joplin et al., 2003; Heilbrunn and Kushnirovich, 2008). The questionnairepassed internal validity tests carried out by experts[1] in the women’s entrepreneurshipfield. The final tool included all corrections based on the experts’ comments.

Three main aspects were investigated via the questionnaire:

(1) Demographic characteristics: ethnicity (1 – Palestinian Israeli women,2 – immigrant women from the FSU, 3 – Jewish Israeli women), education(1 – 12 years, 2 – 12-14 years, 3 – academic), age (1 – 18-34, 2 – 35-44, 3 –45-55, 4 – above 55), marital status (0 – not married, 1 – married), number ofchildren under 18.

(2) Characteristics of businesses: type of business (1 – commerce, 2 – production,3 – services), size of business (number of employees), age of business (in years),business located at home (0 – no, 1 – yes).

(3) Difficulties facing women entrepreneurs: handling laws and regulations,handling competition, recruiting capital, handling management issues, andlack of family support. The women were asked whether they encountereddifficulties with the respective subject or not. The answers for each item wererated as “0 – no” and “1 – yes”.


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ProcedureThe research was conducted in 2009-2010. Data collection was coordinated with theCPEs. The women entrepreneurs were given a detailed explanation of the research andits goals, emphasizing the confidentiality of the data collected. The phone survey wasadministered in Arabic, Hebrew, and Russian by research assistants recruited andtrained especially for this purpose, and the language was the informants’ mother tongue.

Statistical analysisWe performed one-way ANOVA and x 2-tests to determine differences between ethnicgroups according to the businesses’ characteristics: type of business, size of business,age of business, business located at home, and difficulties of women entrepreneurs.Additionally, we conducted uni-variate analyses using one-way ANOVA tests forcontinuous variables and x 2-tests for the categorical variables. For significant resultsof the one-way ANOVA, identification of specific differences between groups wasconducted based on Scheffe’s post hoc test. Similarly, two models of logistic regressionanalyses were conducted to test the prediction of explanatory variables (difficulties ofwomen entrepreneurs) based on the independent variables: ethnic groups, family status,number of children and education. Data analysis was conducted with SPSS statisticalsoftware version 20.

FindingsTable II shows the distribution of the research population’s demographiccharacteristics according to the ethnic group variable. Most of the participants have12 to 14 years of education (70 percent). 77 percent of the participants are married. ThePalestinian Israeli women entrepreneurs are significantly younger than the immigrantwomen in the FSU and Jewish Israeli samples. In addition, we found that PalestinianIsraeli women have more children than immigrant women in the FSU and Jewish

Women ethnic groups

Total(n ¼ 477)

PalestinianIsraeli

(n ¼ 168)

Immigrant fromthe FSU(n ¼ 149)

JewishIsraeli

(n ¼ 160) p-valuesa

Education12 years 6.3 14.1 0.0 3.8 43.88 *

12-14 years 70.0 58.2 70.3 82.3Academics 23.7 27.6 29.7 13.9Family statusNot married 22.5 21.2 20.8 25.5 1.22Married 77.5 78.8 79.2 74.5Number of children under18 M (SD)

1.42 (1.40) 1.94 (1.70) 0.68 (0.76)b, c 1.55 (1.20)d 37.84 *

Notes: Significant at: *p , 0.001; ap-value derived from one-way ANOVA-tests for continuousvariables and x 2-tests for the categorical variables; bsignificant difference between Palestinian Israeliwomen and immigrant women from the FSU ( p , 0.05); csignificant differences between immigrantwomen from the FSU and Jewish Israeli women ( p , 0.05); dsignificant differences betweenPalestinian Israeli and Jewish Israeli women ( p , 0.05); % varies due to missing responses

Table II.Descriptive statisticsof the independentvariables N (% column)

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Israeli samples, and that Jewish Israeli women have more children than FSUimmigrant women ( p , 0.05 on Scheffe’s post hoc test). There is no significantdifference between the Palestinian Israeli, immigrants from FSU and Jewish Israeliwomen for the family status variable.

Table III shows that most of the businesses (48 percent) are commercial, andapproximately 63 percent of the businesses are located at home. The mean businesssize is 1.52 (number of employees) and the mean business age is 9.88 years.

The data reveal that Palestinian Israeli women entrepreneurs establish significantlymore commerce-type businesses and significantly less service-type businesses thanJewish Israeli and immigrant women entrepreneurs. As to size of the business, the datashow significant differences between all groups with the Jewish Israeli women settingup larger businesses in terms of number of employees, followed by FSU immigrantwomen. Most businesses owned by Palestinian Israeli women have no employees, butthey are also significantly older, having been in operation for an average of 11.5 years.Nearly, half of the Jewish Israeli women’s businesses and nearly 40 percent of thePalestinian Israeli businesses are home-based compared to less than 30 percent of theFSU immigrant women’s businesses.

Table IV shows the results of comparing difficulties between the three groups ofwomen entrepreneurs in Israel. The data reveal that Palestinian Israeli womenentrepreneurs encounter significantly more difficulties in handling laws and regulationsthan Jewish Israeli and immigrant women from the FSU. Ethnic group had a moderateeffect (Cramer’s V ¼ 0.24) on handling laws and regulations. We found that more JewishIsraeli women entrepreneurs reported difficulties deriving from market competitionthan Palestinian Israeli and immigrant women entrepreneurs. Ethnic group had a loweffect (Cramer’s V ¼ 0.02) on handling competition. Palestinian Israeli women hadsignificantly more difficulties in recruiting capital for their businesses than immigrantand Jewish Israeli women. Ethnic group had a high effect (Cramer’s V ¼ 0.34) onrecruiting capital. As for handling management issues, we found that Jewish Israeli

Women ethnic groups

Total(477)

PalestinianIsraeli

(n ¼ 168)

Immigrant fromthe FSU(n ¼ 149)

JewishIsraeli

(n ¼ 160) p-valuesa

Type of businessCommerce 43.6 62.7 38.3 28.7 45.800 * *

Production 8.1 9.0 6.0 8.9Services 48.3 28.3 55.7 62.4Size of business M (SD) 1.52 (2.09) 0.72 (1.54) 1.43 (1.67) 2.58 (2.55) 35.68 * *

Age of business M (SD) 9.88 (5.36) 11.54 (6.78) 9.15 (3.74)b 8.78 (4.44)c 13.30 * *

Business located at homeYes 37.3 37.6 28.3 45.2No 62.7 62.4 71.7 54.8 9.273 *

Notes: Significant at: *p , 0.05 and * *p , 0.001; ap-value derived from one-way ANOVA-tests forcontinuous variables and x 2-tests for the categorical variables; bsignificant difference betweenPalestinian Israeli women and immigrant women from the FSU ( p , 0.05); csignificant differencesbetween Palestinian Israeli and Jewish Israeli women ( p , 0.05); % varies due to missing responses

Table III.Descriptive statistics

of characteristicsof businesses


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women had significantly more difficulties than Palestinian Israeli and immigrantwomen from the FSU. Ethnic group had a high effect (Cramer’s V ¼ 0.33) on handlingmanagement issues.

Tables V and VI present a logistic regression analysis of women entrepreneurs inIsrael. The analysis presents separate models for each difficulty investigated in thestudy. A general view of Tables V and VI reveals five different and interesting modelsin terms of the relative effect of the explanatory variables (ethnic groups, family status,number of children, and education). In Table V the reference group is PalestinianIsraeli women, and in Table VI the sample is Jewish Israeli women.

The findings in Tables V and VI indicate that the variables of Model 4 (recruitingcapital) and Model 5 (handling management issues) impact on the difficulties facingwomen entrepreneurs more than those of the other five models. Also, the findingsindicate that the explanatory variables; family status, number of children, and educationhave no significant effect on the possibility of women entrepreneurs facing difficulties.Model 1 shows that Palestinian Israeli women face more difficulties handling laws andregulations than the FSU immigrant and Jewish Israeli women samples. Thus, generalsupport was found for H1.1 and H1.2. Model 2 indicates that Jewish Israeli womenencounter more difficulties handling competition than Palestinian Israeli and FSUimmigrant women. Thus, H2.1 was accepted, as was H2.2.

The findings of Model 4 indicate that Palestinian Israeli women encounter moredifficulties handling the recruitment of capital than FSU immigrant and Jewish Israeliwomen. Thus, support was found forH3.1 however, H3.2 was rejected as no differenceswere found between immigrant women and Jewish women. The findings in Tables Vand VI show that Palestinian Israeli women have more difficulties handlingmanagement issues than immigrant women, but do not have more difficulties thanJewish Israeli women entrepreneurs. Thus, we partially accepted H4.1. Immigrantwomen are the group with the least difficulties handling management issues.

Women ethnic groupsComparison

DifficultiesPalestinian Israeli

(n ¼ 168)Immigrant from the FSU

(n ¼ 149)Jewish Israeli

(n ¼ 160) x 2 df Cramer’s

Handling laws and regulationsYes 51.4 24.8 28.7 23.04 * * 2 0.24No 48.6 75.2 71.3Handling competitionYes 50 53 65 7.47 * 2 0.02No 50 47 35Recruiting capitalYes 69.8 35.9 28.1 58.32 * * 2 0.37No 30.2 64.1 71.9Handling management issuesYes 47.9 12.7 52.8 48.06 * * 2 0.33No 52.1 87.3 47.2Lack of family supportYes 15.4 10.7 21.3 4.78 2 0.09No 84.6 89.3 78.7

Note: Significant at: *p , 0.05 and * *p , 0.001

Table IV.Difficulties encounteredby women entrepreneursper group (% column)

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omen

20.

950.

260.

38*

*0.

610.

241.

85*

21.

780.

270.

16*

*0.

240.

241.

280.

520.

321.

69F

amil

yst

atu

s2

0.09

0.28

0.90

0.02

0.25

1.02

20.

040.

270.

950.

350.

271.

422

0.17

0.35

0.83

Nu

mb

erof

chil

dre

n0.

060.

081.

072

0.06

0.08

0.93

0.03

0.08

1.03

20.

020.

080.

970.

150.

101.

17Education

(ref.12years)

12-1

4y

ears

0.07

0.44

1.08

20.

200.

400.

812

0.08

0.45

0.91

20.

330.

400.

712

0.92

0.48

0.39

Aca

dem

ics

0.28

0.48

1.33

0.04

0.43

1.04

20.

410.

480.

662

0.37

0.44

0.68

21.

060.

540.

34N

agel

ker

keR

20.

090.

030.

190.

170.

05

Note:

Sig

nifi

can

tat

:* p

,0.

05an

d*

* p,

0.00

1

Table V.Logistic regression

models for predictingdifficulties facing women

entrepreneurs in Israel


153

Mod

el1

Mod

el2

Mod

el3

Mod

el4

Mod

el5

Han

dli

ng

law

san

dre

gu

lati

ons

Han

dli

ng

com

pet

itio

nR

ecru

itin

gca

pit

alH

and

lin

gm

anag

emen

tis

sues

Lac

kof

fam

ily

sup

por

tB

SE

BO

RB

SE

BO

RB

SE

BO

RB

SE

BO

RB

SE

BO

R

Pal

esti

nia

nIs

rael

iw

omen

0.92

0.26

2.53

**

*2

0.66

0.24

0.51

**

1.80

0.27

6.09

**

*2

0.21

0.23

0.80

20.

510.

320.

60Im

mig

ran

tw

omen

20.

140.

310.

862

0.56

0.27

0.56

*0.

440.

291.

562

2.05

0.34

0.12

**

*2

0.59

0.40

0.55

Fam

ily

stat

us

20.

150.

280.

850.

010.

251.

012

0.04

0.27

0.95

0.29

0.27

1.34

20.

260.

340.

77N

um

ber

ofch

ild

ren

0.08

0.08

1.08

20.

050.

080.

940.

040.

081.

042

0.01

0.08

0.98

0.16

0.10

1.18

Education

(ref.12years)

12-1

4y

ears

20.

090.

410.

902

0.39

0.38

0.67

20.

090.

420.

912

0.20

0.38

0.81

20.

850.

450.

42A

cad

emic

s0.

110.

451.

112

0.14

0.43

0.86

20.

420.

450.

652

0.25

0.42

0.77

21.

000.

510.

36N

agel

ker

keR

20.

090.

030.

190.

170.

05

Note:

Sig

nifi

can

tat

:* p

,0.

05,

** p

,0.

01an

d*

** p

,0.

001

Table VI.Logistic regressionmodels for predictingdifficulties facing womenentrepreneurs in Israel

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FSU immigrant women entrepreneurs have fewer difficulties handling managementissues than Jewish Israeli women entrepreneurs. Therefore, we also rejectH4.2. Tables Vand VI further reveal that the Wald statistic in Model 5 is insignificant, indicating thatthere is no significant difference as to the independent variable “lack of family support”.Thus, H5 was rejected.

DiscussionIn the framework of this research we focused upon the intersection of gender, minorityand migrant status comparing three groups of women entrepreneurs belonging todifferent socio-economic strata and different ethnic groups of Israeli society. We foundthat gender, class, and ethnicity intersect in different ways and at different levels foreach of the groups. Our findings indicate that the ability of women entrepreneurs tohandle difficulties does not simply correlate with the hierarchy of the socio-economicstatus of the three groups as explained in the second part of the paper. Rather, a morecomplex picture emerges with variations along sources of disadvantages.

Using the disadvantage theory, we categorized the sources of disadvantage intolabor market, resource and women-specific disadvantages. The study revealed thatPalestinian Israeli women have more difficulties overall than women entrepreneursbelonging to the Jewish majority and FSU immigrants. This might be explained via thestratification lens and the institutional framework of Israel. Israel works to incorporateJewish immigrants into the dominant mainstream of society, while discriminatingagainst the Palestinian Israeli minority.

As to labor market disadvantages, we hypothesized that Palestinian Israeli womenwould have more difficulties with laws and regulations than immigrant and JewishIsraeli women. This hypothesis was accepted, as well as the hypothesis that immigrantwomen encounter more of these difficulties than Jewish Israeli women. Thus, both – theminority and the migrant group – have difficulty dealing with the institutionalestablishment in charge of business start-ups. This finding goes along with formerresearch (Heilbrunn and Kushnirovich, 2007) where language and additional culturalbarriers explained the difficulties facing migrant women in Israel. Dealing withcompetition was the second difficulty we investigated in the category of labor marketdisadvantage. H2.1 and H2.2 postulated that Palestinian Israeli and immigrant womenfrom the FSU would have fewer difficulties than Jewish Israeli women in handlingcompetition in the markets of their businesses. The findings indicate that the womenbelonging to the Israeli majority mainstream group reported more difficulties handlingthe competition. We can explain this finding by considering the enclave economyapproach. The Palestinian Israeli population is geographically concentrated mainly inthe northern Galilee region and the central “Triangle” area (Yiftachel, 1992). About85 percent of Palestinian Israelis live in ethnically homogenous communal villages andsmall towns with limited industrial and occupational opportunities (Semyonov et al.,1999). Most of these locations are distant from urban centers. This socio-spatialsegregation is described by Khattab (2002) as an enclave. The enclave model maintainsthat when faced with economic segregation based upon racial, religious or ethniccharacteristics, ethnic minorities establish an ethnic enclave economy, thereby avoidingcompetition with the majority (Lewin-Epstein and Semyonov, 1994). Also Heilbrunn andKushnirovich (2008) found indicators of enclave-oriented entrepreneurs among FSUimmigrants in Israel. Thus, the fact that Palestinian Israeli and FSU immigrant women


155

entrepreneurs operate at least partly within an ethnic enclave can explain the fact thatthey reported fewer difficulties associated with market competition than the dominantgroup of Jewish Israeli women entrepreneurs.

In terms of resource disadvantage, we investigated difficulties in recruiting capital andhandling management issues. Concerning recruiting capital, we found that PalestinianIsraeli women entrepreneurs have more problems than FSU immigrant and Jewish Israeliwomen in accessing capital. The fact that immigrants in Israel do not report moreproblems in capital access than the Israeli born Jewish entrepreneurs is almost certainlydue to the existence of extensive state programs for immigrant entrepreneurs, exclusivelyeligible to immigrants belonging to the Jewish dominant group.

As to handling management issues, we found that Palestinian Israeli women havemore difficulties than immigrant women but not more than Jewish Israeli women. Wealso found that Jewish Israeli women have more difficulties handling managementissues than immigrant women. This finding can be explained by the relatively highlevel of human capital of immigrant women from the FSU in terms of education andexperience in the labor market.

As to women-specific disadvantage, we expected – following the literature – thatPalestinian Israeli women entrepreneurs, characterized by a more traditional societalpattern, would have fewer problems with lack of family support than women belongingto the other two groups. The findings indicate that there is no significant differencebetween the groups, and that for all the groups the vast majority of respondents reportedthat they do not lack family support. One possible explanation might be the fact that wesurveyed only those women who were already business owners. Given that inadequatefamily support might impact the entrepreneurial process before start-up, it may be thatthose who do not expect family support would not proceed to establish a business at all.Further research is needed in order to clarify this issue.

The Israeli economy has changed over the last few decades. The state, which oncehad a crucial impact on the economy, has lost much of its influence due to neo-liberaldevelopments (Maman and Rosenhek, 2009). For political reasons, the PalestinianIsraeli population does not benefit from these developments as much as other groupsand is often excluded from economic advancements (Shihadeh, 2006). Their minoritystatus impacts the entrepreneurial process of Palestinian Israeli women in general, andthe difficulties met during the process in particular.

Our overall findings are consistent with various recent streams in the entrepreneurialliterature stressing the importance of institutional factors rather than overestimating theinfluence of internal factors (Gartner, 2005; Jamali, 2009). Our study adds to the existingliterature by investigating the intersection of ethnicity, gender and socio-economicstatus focusing upon three groups of women in the same country. To the best of ourknowledge, this is one of the first quantitative studies analyzing the interlinked gender,ethnic and socio-economic aspect of entrepreneurship (Korpi et al., 2013).

LimitationsOur study focuses on Israel, thus the findings cannot necessarily be generalized to othercountries. Rather, the findings presented in this paper examine three groups of womenentrepreneurs of which two belong to quite specific groups, respectively, a nationalminority (Palestinian Israelis) and immigrants from the FSU who are incorporated intoIsraeli society on the basis of being Jewish. Although we stated earlier that one of the

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contributions of our study is the very fact that it is quantitative, this might also establishone of its limitations. In-depth interviews with women from the different groups mighthave enabled us to better understand additional underlying aspects of theentrepreneurial process and its constraints.

Directions for future researchMore research is needed to investigate similarities and differences among groupsengaging in entrepreneurship, via the lens of social stratification. Especially, in diverseand multi-cultural settings such as Israel, this approach enables a deeper understanding ofongoing developments. Future research is necessary in order to better understand theparticularities of each group under investigation, and should include analysis of stateschemes and policies aimed at fostering entrepreneurship in general and women’sentrepreneurship in particular. It would then be possible to link sources of disadvantagesto policies, and to develop policies targeting specific groups with specific supportmechanisms.

Note

1. The experts were two colleagues researching similar subjects in Israel, two managers ofnon-profit centers fostering entrepreneurship and one expert on survey methods.

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Corresponding authorSibylle Heilbrunn can be contacted at: [email protected]

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