Gender Impact on Small Firms in Latin America

Abstract

Traditionally, female business owners have been believed to have relative disadvantages in operating businesses compared to their male counterparts especially in developing countries. This study examines whether gender difference affects the cash management efficiency of micro and small enterprises (MSEs) in Latin America. Cash conversion cycle (CCC), the metric which bridges supply chain upstream procurement and downstream sales, is adopted in this study as the key indicator to measure the cash management efficiency. We observe evidence that inventory management is a critical factor that affects CCC. According to our findings, we recommend that MSEs owners in Latin America who want to improve their cash management efficiency but have limited resources should put their first priority on revamping their inventory management system, such as by building up records and basic inventory policies. In addition, we do not find strong evidence of a gender impact on MSEs in terms of cash management, nor any correlations among financial indicators and supply chain management practices that are significant. We also propose a new cash management assessment that relates directly to inventory management, supplier management and customer management practices, and thus, we suggest to further explore this in relationship with financial indicators.