Female-led Firms Research Articles

Bribe or Die: Gender Differences in Entrepreneurship in Emerging Markets

This paper examines the relation between gender differences in entrepreneurship and firm-level bribery, one of the most impactful business obstacles to private sector growth. Using data from a comprehensive survey covering 16,560 enterprises in 32 emerging economies, we find that female-led firms account for 19.2% of all enterprises, which is approximately 4 times lower than the share of male-led firms, and that female entrepreneurs experience a higher level of bribery than their peers. The impact of gender on bribery is more pronounced among firms located in countries that are more corruption-prone and becomes weaker among countries with a higher female graduation ratio at the tertiary level. In addition, female-run firms have a lower likelihood of obtaining a construction permit, securing a government contract, or holding an operating license. Overall, the results suggest that a bribe-to-survive motive is a possible explanation for the higher level of bribery among female-led firms in emerging markets.

Are female-led firms disadvantaged in accessing bank credit? Evidence from transition economies

PurposeThe purpose of this paper is to provide empirical evidence on the presence of gender-based discrimination in formal credit markets during the global financial crisis. Specifically, the study tests for gender differences in the probability of being credit-rationed, in the likelihood of being a discouraged borrower and in the price conditions of bank financing.Design/methodology/approachThis paper uses the fifth wave of the Business Environment and Enterprise Performance Survey (BEEPS), which provides detailed micro data on firms from 26 transition economies in Europe and Central Asia. The empirical analysis employs linear and non-linear sample selection regression models and extended Blinder-Oaxaca decomposition techniques to assess gender differences in access to credit.FindingsControlling for a large set of observable firm characteristics and for endogenous selectivity, we find that female-led firms are more likely to face financing constraints and to be discouraged from applying for credit than their male counterparts. Conditional on having obtained a loan, female-led firms also face significantly higher interest rates. Furthermore, the observed gender gaps are mainly due to unexplained factors, supporting the hypothesis that banks discriminate against women-led firms in their credit-granting decision.Originality/valueThis study provides new insights on gender discrimination in formal credit markets, highlighting that gender differentials in access to credit significantly vary across countries and strongly depend upon the definition of the firm's gender structure. From a policy perspective, the evidence obtained stresses the need for policies aimed at promoting the role of women in the economic environment in order to reduce discrimination and raise competition in credit markets. Moreover, public interventions should support lending to creditworthy female enterprises in order to improve their perceptions about banks' willingness to grant credit and reduce their propensity to be discouraged from applying.

Bank credit, microfinance and female ownership: Are women more disadvantaged than men?

Using a comprehensive dataset on unlisted firms in 22 developing countries this paper analyses the relationship between gender, microfinance and access to bank credit. Using heckprobit to control sample selection bias, we reveal evidence of discrimination against female-owned and female-led firms. Also, we find that a mechanism for microfinance to empower women is facilitating loan applications and loan approvals for female-owned firms. Our paper highlights the importance of addressing gender discrimination in the credit market in order to facilitate the development of female-owned firms.

Bribe or die: gender differences in entrepreneurship in emerging markets

ABSTRACT This paper examines the relation between gender differences in entrepreneurship and firm-level bribery, one of the most impactful business obstacles to private sector growth. Using data from a comprehensive survey covering 16,560 enterprises in 32 emerging economies, we find that female-led firms account for 19.2% of all enterprises, which is approximately 4 times lower than the share of male-led firms, and that female entrepreneurs experience a higher level of bribery than their peers. The impact of gender on bribery is more pronounced among firms located in countries that are more corruption-prone and becomes weaker among countries with a higher female graduation ratio at the tertiary level. In addition, female-run firms have a lower likelihood of obtaining a construction permit, securing a government contract, or holding an operating licence. Overall, the results suggest that a bribe-to-survive motive is a possible explanation for the higher level of bribery among female-led firms in emerging markets.

Gender and Overconfidence in the Kauffman Firm Survey

Abstract While an emerging line of research has begun to examine how firm survival correlates with the psychological trait of overconfidence, almost none of this work looks at how this relationship is mediated or modified by the minority status of the individual within the area of entrepreneurship. We employ a proportional hazard survival model and analyze the Kauffman Firm Survey (KFS) of entrepreneurs during the period of 2004-2012. We find that, while overconfidence relates to firm survival, it is more strongly related to survival for female than for male entrepreneurs. Our analysis is unique in examining the trait of overconfidence for small firm survival, and it is the first that we know of to stratify the effects of this overconfidence by gender. The present work has implications for possible methods and strategies to promote the entrepreneurship of individuals from underrepresented groups, with an eye towards owner-overconfidence helping female-led firms to survive the first few years of a firm’s existence.

Do Female Investors Support Female Entrepreneurs? An Empirical Analysis of Angel Investor Behavior

There is an ongoing debate on why female entrepreneurs face greater challenges than their male counterparts do in raising capital for their companies. Rooted in homophily – theory supporting the notion that women support women – is the argument that there are not enough female investors to support female-led firms. In the context of accredited investor-investee exchanges, we explored whether the gender of investor and the gender of investee’s CEO are related. Using a United States sample of 529 investments from fiscal year 2018, we found a significant association between the gender of investor and the gender of the investee’s CEO. These findings suggest that homophily may be a key social mechanism through which gender can impede or promote investment decisions.

Leader gender and firm investment in innovation

PurposeThe purpose of this paper is to examine the influence of business leader gender on the pursuit of innovation opportunities. Extant research suggests that leader gender represents an important characteristic that shapes firm behavior in various ways. The authors build upon this research by relating business leader gender, perceptions of environmental munificence and distributive justice to firm investment in innovation.Design/methodology/approachThis study examines the survey responses of 469 business leaders in India. These individuals were primarily responsible for their firms. Their responses to survey questions were analyzed using ordinary least squares regression.FindingsThe results of this study suggest that female-led firms exhibit less investment in innovation than male-led firms. Results also suggest that female business leaders perceive less environmental munificence as well as distributive justice. Finally, study results suggest that the effect of gender on firm investment in innovation is mediated by perceptions of distributive justice.Originality/valueThis study provides an empirical link between business leader gender and firm investment in innovation. In doing so, it acknowledges and provides insight into the gendered nature of the initiation of innovation processes and leadership. Finally, the finding that business leader perceptions of distributive justice mediate the relationship between business leader gender and investment in innovation extends current understanding of the mechanisms underlying the lower investment in innovation rates exhibited by female-led firms.

Performance of male and female-led firms

International Journal of Contemporary Management » 2018 » Issue 17(2) » Performance of male and female-led firms A A A

Which Firms are Friendly to Female Employment? - Empirical Evidences from Manufacturing Enterprises in Southeast Asia -

최근 연구에 따르면 개발도상국에서 여성의 고용은 양성평등은 물론 가구의 건강 및 교육에 긍정적인 영향을 미친다. 그럼에도 불구하고 어떤 특성을 가진 기업이 여성 고용에 더 친화적인가에 대한 실증적 연구는 매우 드물다. 본 연구는 동남아시아 6개국의 2천개 이상 제조업체에 대하여 기업특성이 여성고용의 세 측면, 즉 고용비중, 고용유연성, 최고경영자가 될 확률에 미치는 효과를 실증 분석하였다. 분석 결과 일반적 인식과 달리 기업 규모가 클수록 여성의 고용비중이 높은 것으로 나타났다. 반면 기업의 업력은 길수록 여성의 고용비중이 낮아지고 고용의 유연성도 떨어진다. 그리고 수출지향적 기업과 여성 경영기업은 고용비중과 유연성 측면에서 여성 고용에 친화적이지만, 외국인투자 여부는 유의한 영향을 미치지 않았다. 따라서 여성고용 촉진을 위해서는 규모를 기준으로 중소기업을 지원하는 것보다 업력을 기준으로 신생기업을 지원하는 것이 효과적일 것이다. (JEL 분류: O15, F66, J16)Recent studies observe that female employment contributes to household health and education as well as female empowerment. However, there are very few studies to examine what characteristics of the firm are associated with female employment. This study analyzes which firms are more friendly to three different aspects of female employment, i.e. employment share, employment flexibility, and promotion to CEO, using data of approximately 3,000 manufacturing enterprises in 6 Southeast Asian countries. Large firms turn out to have a higher female share in employment, which is contrasted with conventional perception. Older firms are less likely to employ female workers and to hold flexibility in female employment. Export-oriented or female-led firms are more friendly to female employment, but foreign-invested firms have no significant difference from locals. These results propose greater support for start-ups and female-led firms for larger female employment.

Female entrepreneurs: motivations and constraints. An Italian regional study

Purpose This paper aims to identify the specific contextual constraints that women might face in becoming entrepreneurs; to correlate these constraints with the motivations that have determined this choice; and to ascertain how strongly constraints and motivations are correlated with individual rewards in terms of personal satisfaction and economic payoffs. Design/methodology/approach The empirical base is a survey that the authors conducted among female entrepreneurs in a Southern province of Italy in 2012. Data are analyzed through a correspondence and cluster analysis. The socio-economic context of the province within which these female-led firms operate is taken into account by means of a correspondence canonical analysis. Findings In terms of results: first, two-thirds of female entrepreneurs in the province are positively motivated, and this is a determining factor in their choice to become entrepreneurs. This translates into they also being satisfied with the choice they made. Second, contrary to the expectations, being positively motivated and satisfied holds both for firms operating in more dynamic and demanding sectors and for small firms using little financial or human capital. Research limitations/implications The chosen research approach has allowed to identify the most important decisional variables that affect female entrepreneurial choice. However, as most of the variables are categorical, the research’s results remain descriptive. Practical implications Positive motivations and personal rewards are clearly relevant for women making an entrepreneurial choice. However, they are not enough to stimulate fully the potential for growth of their enterprises: education and a social environment conducive to female creative expression are also necessary. To this end, the authors suggest that an important function of change could be played in particular by universities by fostering a culture of creativity and entrepreneurship. Social implications By stressing the connections between positive motivations and wellbeing, the authors suggest that the promotion of women’s entrepreneurial choices through networks and education generates more than purely economic benefits. It also has positive effects on their quality of life and on social welfare as well. Originality/value This paper responds to a need – not yet fulfilled in the literature – to better understand the relations between women’s motivation, satisfaction and the type of business selected.

Economic crisis, women entrepreneurs and bank loans: some empirical evidence from Italy

This paper presents the main findings from an empirical research project, whose aim was to answer the following research questions: (1)Did men and women entrepreneurs ask for new bank loans during the crisis? (2) Did they obtain required bank loans at the same conditions? (3) Which variables, other than gender, influence access to bank credit? Data show that firms were very cautious in access to finance during the crisis and female-led firms asked for bank loans more rarely than male-led ones. Entrepreneurs’ gender, age and education, banking history and industry only slightly affected access to credit during the crisis.

Female CEOs, Firm Performance, and Firm Development: Evidence from Thai Manufacturers

Even though there are a number of previous studies investigating the underperformance of female-led firms as compared to male-led ones, none have investigated the impact of women as heads of firms in terms of short-term performance (sales and profit) and long-term development (innovation and training). Using 1,043 manufacturing firms in Thailand as a case study of a developing country in which the proportion of women chief executive officers (CEOs) is the highest among the Southeast Asian countries, this article investigates the impact of female CEOs on both short-term performance and long-term firm development. Even though the number of women in the manufacturing sector is limited, women CEOs of Thai manufacturing companies are found to have a negative effect on both short-term financial performance indicators, including the annual sales and profits, as well as long-term development of firm indicators (product innovation, process innovation, and provision of employee training). However, this negative association of short-term financial performance is weaker in the case of women CEOs who have completed college. In addition, more experienced women CEOs are more likely to provide employee training. Promoting highly educated and experienced women in management positions as well as providing them with training should be a priority in order to enhance the short-term and long-term performances of their companies.

Female-Led Firms: Performance and Risk Attitudes

This paper investigates the relationship between gender of the CEO and composition of the board of directors (female chairman and share of women in the boardroom) and firm's risk attitudes measured as variability in four firm outcome variables (investments, profits, return to equity, and sales). Using a merged employer-employee panel sample of Danish companies with more than 50 employees, we find extensive evidence of a negative association between female CEO and firm's risk attitudes. This finding might be consistent with the theoretical assumption according to which women typically present a substantially higher risk aversion profile and put more effort in monitoring firm activities than men in the financial matter domains. A number of robustness checks corroborate and better explain our main findings.

Gender and Rural Non-Farm Entrepreneurship

Despite their increasing prominence in policy debates, little is known about gender inequities in non-agricultural labor market outcomes in rural areas. Using matched household-enterprise-community data sets from Bangladesh, Ethiopia, Indonesia and Sri Lanka, this paper documents and analyzes gender differences in the individual portfolio choice and productivity of non-farm entrepreneurship. Except for Ethiopia, women are less likely than men to become nonfarm entrepreneurs. Women's nonfarm entrepreneurship isn't strongly correlated with household composition or educational attainment, but is especially prevalent amongst women who are the head of their household. Female-led firms are much smaller and less productive on average, though gender differences in productivity vary dramatically across countries. Mean differences in log output per worker suggest that male firms are roughly 10 times as productive as female firms in Bangladesh, three times as those in Ethiopia and twice as those in Sri Lanka. By contrast, no significant differences in labor productivity were detected in Indonesia. Differences in output per worker are overwhelmingly accounted for by sorting by sector and size. They can't be explained by differences in capital intensity, human capital or the local investment climate, nor by increasing returns to scale.

Female-Led Firms and Gender Wage Policies

Using a longitudinal dataset covering the period 1987–2000, the authors explore the impact of female employers and gender segregation on wages in Portugal. In the context of Becker's (1957) taste for discrimination theory, they investigate whether the gender of a firm manager affects gender wage differences. They find that females benefit from higher wages in female-led firms than in male-led firms. Further, when females lead, the wage gap between female and male workers is reduced by 1.5%, regardless of the gender composition of the firm's workforce. At the same time, the higher the share of females in a firm, the lower the wages overall for both female and male workers. The authors' results are compatible with the notion that job promotion is an important factor in wage increases. The more females are mentored and promoted, the less men will be. However, as more females in the firm compete for promotion, opportunities for both females and males to be promoted diminish.

Mentoring and Segregation: Female-Led Firms and Gender Wage Policies

Mentoring and Segregation: Female-Led Firms and Gender Wage Policies