Causation assumes the future is predictable, requiring high up-front resource commitments (Sarasvathy, 2001; Smolka et al, 2018). As demonstrated through transparent, formalized business plans presented to investors, this explicit commitment is considered a driving force behind the firm’s success (Smolka et al, 2018).

There are several reasons why the business performance of female and male entrepreneurs who practice causation could differ. As women are underrepresented in Science, Technology, Engineering, and Mathematics (STEM), they are subject to negative stereotyping in the high-tech sector (Coleman and Robb, 2009). Constantinidis et al. (2006) report more intensive scrutiny of firms owned by female founders, making the female entrepreneurs more stringent in their business planning processes. While Kanze et al. (2018) attribute this to the investors’ perceptions that women entrepreneurs are less focused on achievements, Brush et al. (2018) claim that this is simply because women seek (and require) less funding, so the investors allocate less funding to female entrepreneurs.

It can be concluded thus that female entrepreneurs in high-tech sectors operate in an environment where investors, customers, and stakeholders often question their ability to lead and grow firms successfully (Huang et al, 2020; Kanze et al, 2018). This heightened scrutiny means that simply being competent is not enough—women must actively demonstrate a level of preparation, strategic foresight, and risk mitigation that exceeds what is typically expected of men.

Given this reality, female entrepreneurs may engage in causation-based planning more rigorously than their male counterparts, not necessarily by choice but as a survival strategy to ensure credibility and secure resources. By developing highly structured business plans, conducting detailed market analyses, and minimizing uncertainty, these women become exceptionally prepared for both internal management and external evaluation. Consequently, we expect that female entrepreneurs who adopt a causation-based approach will see greater firm performance benefits than those who do not, as this strategic rigor allows them to navigate investor bias, establish legitimacy, and optimize decision-making.

Hypothesis 1: Female entrepreneurs who adopt a causation-based approach will achieve higher firm performance compared to their male counterparts.

Recent studies propose that adopting an experimental approach significantly improves organizational learning (Levinthal et al, 2017; Gans et al, 2019; Camuffo et al, 2020). It is considered essential for companies to embrace experimentation as a core component of their organizational learning process (Berends et al, 2016). In the high-tech sector, where uncertainty is high, successful firms must often pivot their strategies based on trial-and-error learning (Andries et al, 2013). Experimentation is crucial for building a sustainable and profitable company (Heikkilä et al, 2018).

However, the effectiveness of experimentation as a strategy may differ by gender (Lopez-Nicolas et al, 2020). Existing research suggests that women entrepreneurs exhibit greater risk aversion than men (Fehr-Duda et al, 2006; Palvia et al, 2015). Since experimentation involves high uncertainty, potential failures, and unpredictable outcomes, risk-averse entrepreneurs may struggle to embrace it fully. For female entrepreneurs, this risk sensitivity may make experimentation less effective as a strategy for business growth.

Additionally, external constraints play a significant role. Female entrepreneurs often have less access to financial resources, fewer networking opportunities, and lower levels of institutional support than their male counterparts (Brush et al, 2018). Since experimentation typically requires capital investment, time, and iterative learning, these resource limitations may prevent women from fully leveraging the benefits of experimentation.

Another critical factor is perception bias and social expectations. Male entrepreneurs are often perceived as calculated risk-takers when they experiment and fail. However, when female entrepreneurs experience failure, it may reinforce negative stereotypes about women being less competent in business (Huang et al, 2020). This increased scrutiny may lead female entrepreneurs to avoid experimentation altogether or engage in it more conservatively and constrainedly. Given these dynamics, we hypothesize that:

Hypothesis 2: Female entrepreneurs who adopt an experimentation-based approach will experience lower firm performance compared to their male counterparts.

The affordable loss principle prioritizes risk minimization by committing only what an entrepreneur can afford to lose, ensuring that business decisions do not jeopardize financial stability (Read et al, 2009). Entrepreneurs applying this strategy focus on careful resource allocation and lower-risk investments, allowing them to sustain operations even in uncertain environments (McKelvie et al, 2013).

Women entrepreneurs, particularly in high-tech sectors, are more likely to adopt this approach due to higher risk aversion (Fehr-Duda et al, 2006; Palvia et al, 2015). Studies indicate that women tend to be more cautious in financial decision-making (e.g. Powell and Ansic, 1999), reflecting a preference for lower-risk, incremental growth strategies. Additionally, female entrepreneurs face greater challenges in accessing external funding (Brush et al, 2018; Coleman and Robb, 2009), reinforcing the need for a disciplined financial approach.

While high-risk strategies can lead to substantial rewards, they also increase the likelihood of business failure, particularly in capital-intensive industries like high-tech (McKelvie et al, 2013). Entrepreneurs who strategically apply affordable loss can maximize efficiency, making incremental gains while maintaining financial control (Read et al, 2009). Given that women are more likely to follow this approach, they may experience stronger firm performance than those who take greater financial risks.

Hypothesis 3: Female entrepreneurs who adopt an affordable loss approach will experience higher firm performance compared to their male counterparts.

Flexibility involves adapting to changing circumstances while balancing being prepared and being open to new possibilities. The incorporation of flexibility into business activities may encompass strategies such as the adaptation of business models and the integration of inherent flexibility within products and services (Frese et al, 2020). Among other things, flexibility is beneficial to organizations because it promotes innovation (Buganza et al, 2010), helps to navigate uncertainty (Cai et al, 2017), and sustains long-run performance (Teece, 2007). Some studies have found positive effects of flexibility as a dimension of effectuation on firm performance under uncertainty (e.g. Yu et al, 2018).

Practicing flexibility can also lead to unintended consequences within organizations, particularly SMEs, who may find it challenging to engage effectively with unplanned opportunities. Frequent shifts or experimentation with different strategies might lead to inefficient allocation of resources, potentially endangering growth and profitability. A heightened level of flexibility can also give rise to variable product or service quality, which could cause customer attrition and diminish overall profitability. Moreover, unrestrained exploration of emerging opportunities may result in a lack of clear strategic direction, sending negative signals to investors.

Alleged risk-averseness of women-owned SMEs is likely to help them in avoiding these negative consequences, as risk-averse leaders may be expected to employ gradual, less disruptive changes when implementing flexibility. Furthermore, women-owned SMEs commonly prioritize collaborative leadership styles, fostering an environment that encourages team members to fully embrace and effectively implement flexible strategies. This approach allows them to respond to market changes while maintaining financial and operational stability.

Hypothesis 4: Female entrepreneurs who adopt a flexibility-based approach will experience higher firm performance compared to their male counterparts.

Extant studies have documented the importance of networking activities when starting a new venture and ensuring positive business outcomes at the more mature phases of the enterprise. Networking encompasses building relationships with suppliers, customers, and competitors from the industry to establish the enterprise’s market position and secure its continuous prosperity. The large spectrum of evidence extends to the positive role of parents’ networks (Sorenson et al, 2009) and the importance of political connections in growing industries (Li and Jin, 2021). Relying on networks is particularly important in the high-tech sector (Anderson et al, 2007), where establishing an enterprise requires obtaining a unique blend of knowledge, enabling the entrepreneur to navigate the complexities of the market. By practicing the effectuation principle of pre-commitments, an entrepreneur is likely to reach important milestones more quickly or to develop a relationship with their customers (McKelvie et al, 2013), enhancing the enterprise’s sales, profits, and assets (Eyana et al, 2018).

It has been frequently argued that female entrepreneurs are excluded from the most influential business networks (Smallbone and Welter, 2001). This has been partially attributed to the fact that formal business networking usually takes place outside regular business hours (Cross and Linehan, 2006), and in most societies, women are disproportionately expected to assume housekeeping roles, which constrains their out-of-work availability. Others emphasize that women and men entrepreneurs have different approaches to networking. Men identify more strongly with established business networks (Hampton et al, 2009) and invest more time in after-work socializing activities (Zhao and Yang, 2021), which enables them to build informal alliances (Mickey, 2022) that they can capitalize on later in their business activities. Female entrepreneurs are more likely to focus on building collaborative and inclusive relationships, they are better at extracting relevant information from different sources (Dai et al, 2019), they excel at effectively using their social competencies (Godwin et al, 2006), enabling them to establish positive relationships with their customers, subsequently setting a stage for longer-term positive feedback from their networks. Given these dynamics, we hypothesize that:

Hypothesis 5: Female entrepreneurs who adopt a pre-commitment approach will experience higher firm performance compared to their male counterparts.

Estimating latent constructs indicates that all the item loadings are higher than 0.5 and statistically significant at a 1% significance level (Appendix Table 5). Dillon–Goldstein’s rho (DG) was used to assess internal consistency because of the limitations of Cronbach’s alpha (CA), such as assumptions of uncorrelated errors and normality (Yang and Green, 2011). DG, CA, and composite reliability (CR) were interpreted as acceptable internal consistency at 0.6–0.7 and good internal consistency greater than 0.7. Convergent validity is ensured by the average variance extracted (AVE), higher than 0.5 for all the constructs.

The discriminant validity of the measurement model represents the extent to which a construct is genuinely distinct from other constructs by empirical standards (Hair et al, 2021), which can be examined through cross-loadings and the Fornell–Larcker criterion. All indicators’ outer loadings on the associated constructs are larger than those on other constructs, thus establishing discriminant validity (Appendix Table 6). Fornell–Larcker criterion, which compares the square root of AVE with correlations between latent variables, also shows that the square root of AVE is larger than the largest correlation with any other construct in all cases (Appendix Table 7). Therefore, the constructs considered in this study possess adequate discriminant validity.

Before focusing on our main results, we disclose that within our sample, men report higher intensities in practicing most strategic approaches. Specifically, women report somewhat lower average intensities of engagement in causation (means are 3.65 for women and 3.76 for men, p = 0.20), experimentation (means are 3.65 for women and 3.76 for men, p = 0.02), affordable loss (means are 3.71 for women and 3.90 for men, p = 0.04), but higher for flexibility (means are 3.62 for women and 3.57 for men, p = 0.19) and pre-commitments (means are 3.36 for women and 3.35 for men, p = 0.93). The following section tackles whether female entrepreneurs can attain improved enterprise performance by employing each of these strategic approaches.

Our results are presented in Table 1. While our dependent variable, value added divided by firms’ assets, remains the same across all three model versions, we add one more regressor block in each successive version. Doing so increases our models’ explanatory power (adjusted R²) from 0.469 to 0.602.

Our results indicate that being a female business owner per se does not affect performance in any model version. However, interesting findings emerge when we include strategic approaches in the model. On average, practicing causation is negatively associated with firm performance in our sample. However, when women-owners practice causation, the firm’s performance improves.

We find that, on average, adopting the experimentation principle is positively associated with performance in general but negatively associated with firm performance when female entrepreneurs practice this principle. We further establish that, while flexibility and pre-commitments are, on average, negatively related to firm performance, they exert a positive performance when practiced by women owners.

We have not found a significant effect on practicing the affordable loss principle for the whole sample or women-owned enterprises.

Estimates for the third version of the model, capturing gender and adopted strategic approach interactions, are presented in Appendix Fig. 1.

Previous research has produced inconclusive results regarding the differential use of causation and effectuation principles between male and female entrepreneurs. In a qualitative study, Frigotto and Valle (2018) found that men rely more on the effectuation framework than women but observed no significant gender-based differences in adopting the affordable loss criterion. Cowden et al. (2023) suggested the opposite. However, none of the previous studies consider the European post-transition context, which is highly specific due to SMEs’ obstacles and enablers related to market transformation and EU integration processes. Furthermore, by focusing on the high-tech sector, where rapid technological advancements reduce dependence on local market constraints, we can reasonably assume that our results may apply to other post-transition economies.

In our study, we delve deeper into the dimensions of effectuation within the high-tech knowledge-intensive sector, revealing significant gender disparities only in experimentation and affordable loss, with men reporting higher levels of engagement. However, greater intensity in these strategies does not necessarily translate into superior firm performance. Therefore, we investigate the effectiveness of women and men-owned SMEs in applying causation and all four dimensions of effectuation. We assess this effectiveness based on their actual performance outcomes.

We extend previous findings in the literature by showing that causation harms the performance of all SMEs in the analysed high-tech sectors, which aligns with findings from Yang et al. (2021). Interestingly, the negative impact appears to be less pronounced for women, in contrast to Yang et al. (2021) assertion that found a more detrimental effect for women. In other words, we establish that high-tech female entrepreneurs can extract higher business achievements for their enterprises when relying on causation. One explanation lies in the greater scrutiny women in high-tech face when proving the viability and health of their firms to investors. This scrutiny often necessitates providing evidence of causal business practices (such as convincing business plans). Therefore, to secure crucial external funding, which plays a pivotal role in high-tech, and considering gender biases exhibited by investors (Bellucci et al, 2010; Alesina et al, 2013), women within this sector may be increasingly turning to causation-based planning strategies. Women who embrace causation to a greater extent may be better equipped to secure funding and enhance the performance of their firms.

Next, we explored the four different dimensions of effectuation. Although women entrepreneurs do not significantly differ in the intensity with which they practice pre-commitments and flexibility, they achieve higher firm performance than men when they engage in these approaches.

Since it has been frequently argued that women are not equally participating in traditional business networks (Smallbone and Welter, 2001), our findings that female entrepreneurs can capitalize on their networking activities (using pre-commitments) are highly encouraging. This observation stems from the notion that women highly value relationships and communication as integral components of the decision-making process (Burke and Collins, 2001), which could shield their businesses during highly volatile business periods. Our findings align with these discoveries, indicating that female entrepreneurs who engage in pre-commitment are more likely to achieve superior performance. This is an important finding, as pre-commitment strategy is beneficial in the high-tech sector characterized by high uncertainty and changing markets.

Our findings further indicate that female business owners who adopt a flexible approach are more likely to achieve favourable business performance outcomes. This aligns with the argument that while stakeholders value female entrepreneurs for their risk-averse and strategic planning, women often face greater pressure to reconfigure existing resources to meet business challenges creatively. Since female business operations tend to be relatively small, their dependence on restricted networks of suppliers and customers could have presented a more considerable obstacle during the COVID-19 crisis (Rahayu and Ellyanawati, 2023). For female owners, the strategic intent to rely on flexibility and creatively combine already limited resources could have played a pivotal role in navigating the challenging economic climate. Our results, in line with the findings of Kubberød et al. (2021), who establish ‘non-belonging’ as an enabling factor of female entrepreneurs’ resilience in the male-dominated high-tech sectors, are, in that respect, encouraging since they reveal that female entrepreneurs successfully dealt with the challenges.

Our findings indicate that adopting the experimentation principle is generally positively associated with firm performance. However, when female entrepreneurs engage in experimentation, it negatively impacts their performance. The positive overall relationship between experimentation and performance aligns with expectations. However, the negative impact on female entrepreneurs is not expected, suggesting that women may not receive the same rewards for experimentation as their male counterparts.

One possible explanation lies in the historically male-dominated nature of high-tech industries, where women are often perceived as more risk-averse (Palvia et al, 2015). Given these prevailing stereotypes, female entrepreneurs may be less likely to engage in experimentation at the same intensity as men, making it harder to yield significant performance gains. Research by Alonso-Almeida and Bremser (2014) suggests that women entrepreneurs adopt more neutral or conservative strategies during crises, whereas men are more likely to pursue proactive, growth-oriented measures. Additionally, limited financial resources may constrain the effectiveness of experimentation for female entrepreneurs. Without sufficient funding, women may be unable to conduct experiments on a large enough scale to generate meaningful results, leading to incomplete insights and suboptimal decision-making.

Finally, it is essential to recognize that our results exhibit a somewhat modest level of statistical significance. Nevertheless, it is worth noting that directions of all estimated coefficients remain stable between model versions (2) and (3) and, thus, could still be consistent with the expectations. Nevertheless, due to the limited size of our dataset, the extent of variation is insufficient to ensure a higher statistical significance (Amrhein/Greenland/McShane 2019).