The Effects of Formal and Informal Institutions on Women’s Entrepreneurship in Georgia

The aim of this chapter is to address the impact of formal and informal institutions on women’s entrepreneurship and to extend our understanding of issues influencing women-owned businesses and women’s entrepreneurship in the context of a transition economy, such as Georgia. Our work specifically addresses formal institutions, such as governmental initiatives, financial institutions, and business-relevant education. It also addresses informal institutions, such as women’s role in society, the use of informal networks of connections and acquaintances, and gift-giving practices. Drawing on results from an online focus group discussion with women entrepreneurs in Georgia, we provide initial insights into the critical constraints and supporting factors that local women entrepreneurs experience. Based on the interrelation of institutions and women’s entrepreneurship, we conclude that changes in formal institutions do not lead directly to changing informal institutions. Due to the lack of trust in formal institutions, women entrepreneurs are more likely to look for business development solutions outside the official frames, including illegal or unethical means of survival. Nevertheless, increased opportunities – induced by specific entrepreneurship policies and programs – encourage women to enter entrepreneurship. In addition to this, entrepreneurship enables women in Georgia to overcome gender discrimination issues, which is more prevalent in employment relationships in the local labor market than in entrepreneurial activities.