Nelli S. Gazanchyan & Nigar Hashimzade & Yulia Rodionova & Natalia Vershinina, 2017. “Gender, Access to Finance, Occupational Choice, and Business Performance,” Working Paper Series 6353, CESifo.
We analyze, in a model of occupational choice in the labour market and discrimination in the capital market, the relationship between the gender of the owner and of the top manager of a firm, access to finance, and this firm’s performance. Occupational choice serves as the link from the capital market to the labour market. The model predicts that if the lenders discriminate against female entrepreneurs, then the conditional average of entrepreneurial skill of female business owners and female top managers is higher than that of their male counterparts. We find empirical evidence in support of our model using firm-level data from the 2009 wave of the Business Environment and Enterprise Performance Survey (BEEPS) for twenty six emerging economies in Eastern Europe and Central Asia. Specifically, we find evidence of discrimination of women in the capital market. Furthermore, we find a positive effect of the female gender of a business owner and of a business top manager on business performance, after controlling for various factors, including possible constraints on access to external finance. The positive effect of a female top manager is mitigated if the firm is owned by a female, suggesting decreasing return to skill, or if it operates in certain industries where female leadership may be of special value, which could be an additional factor in the occupational choice.
Sabarwal, Shwetlena and Terrell, Katherine, “Does Gender Matter for Firm Performance? Evidence from the East European and Central Asian Region“, (July 2008). SSRN Papers
Using 2005 firm level data for 26 countries in Eastern and Central Europe, this paper estimates performance gaps between male and female-owned businesses, while controlling for location by industry and country. The findings show that female entrepreneurs have a significantly smaller scale of operations (as measured by sales revenues) and are less efficient in terms of total factor productivity, although the difference is small. However, women entrepreneurs generate the same amount of profit per unit of revenue as men. Although both male and female entrepreneurs in the region are sub-optimally small, women’s returns to scale are significantly larger than men’s, implying that women would gain more from increasing their scale. The authors argue that the main reasons for the sub-optimal size of female-owned firms are that they are both capital constrained and concentrated in industries with small firms.
Bardasi, E., Sabarwal, S. & Terrell, K. ” How do female entrepreneurs perform? Evidence from three developing regions. ” Small Bus Econ 37, 417 (2011).
Using the World Bank Enterprise Survey data, we analyze performance gaps between male- and female-owned companies in three regions—Eastern Europe and Central Asia (ECA), Latin America (LA), and Sub-Saharan Africa (SSA). Among our findings are significant gender gaps between male- and female-owned companies in terms of firm size, but much smaller gaps in terms of firm efficiency and growth (except in LA). Part of the reason women run smaller firms is that they tend to concentrate in sectors in which firms are smaller and less efficient (in ECA and SSA). By contrast, we find no evidence of gender discrimination in access to formal finance in any of the three regions, although in ECA women are less likely than men to seek formal finance. Finally, while female entrepreneurs receive smaller loans than their male counterparts, the returns from each dollar they receive is no lower in terms of overall sales revenue.
Sabarwal, Shwetlena and Terrell, Katherine, Does Gender Matter for Firm Performance? Evidence from the East European and Central Asian Region (July 2008). Social Science Report Network (SSRN) Papers.
Using 2005 firm level data for 26 ECA countries, this paper estimates performance gaps between male- and female-owned businesses, while controlling for their location by industry and country. We find that female entrepreneurs have significantly smaller scale of operations (as measured by sales revenues) and are less efficient in terms of Total Factor Productivity (TFP), although this difference is very small. However, they generate the same amount of profit per unit of revenue as men. We find that while both male and female entrepreneurs in ECA are sub-optimally small, women’s returns to scale are significantly larger than men’s implying that they would gain more from increasing their scale. We argue that the main reasons for the sub-optimal size of female-owned firms are that they are both capital constrained and concentrated in industries with small firms.