Female managers and firm performance: Evidence from the non-agricultural sectors in caribbean countries

Abstract

This paper investigates whether female-led firms in the Caribbean region are less productive than their male-led counterparts. Whereas previous literature focused on female ownership as a measure of female entrepreneurship overlooking the limited involvement of female owners in the decision-making process, we focus on the gender of the top manager to re-examine the existence of a productivity gap in developing countries, for which evidence is still scarce. Using survey data with gender-related information for firms in non-agricultural private sectors, we apply regression analysis and Blinder-Oaxaca decomposition. We find that female-managed firms in the services sector are on average around 18 per cent less productive than male-managed firms. The main results underscore the role of business constraints in explaining heterogeneous productivity gaps, indicating that female-managed firms encounter greater constraints than their male-managed counterparts. We find that poor access to finance, improper political environment and limited access to electricity mostly affect firms led by women.