The gender gap in access to finance: Evidence from the COVID-19 pandemic

Nirosha Wellalage (), Sabri Boubaker, Ahmed Hunjra () and Peter Verhoeven

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: Using gender as a theoretical framework, we analyse the dynamics of debt and equity financing during the COVID-19 pandemic for a cross-country sample of 8,921 private firms. We provide evidence of a slight gender bias in debt financing, with creditors favouring female entrepreneurs when dealing with cash flow problems during the COVID-19 pandemic. We find no evidence of gender bias in equity financing. The results are robust after controlling for a larger number of firm-specific characteristics and selection bias. We challenge the assumption of “gender-based discrimination” in the debt market, speculating that in the context of high uncertainty, prototypical forms of femininity may be advantageous as financial institutions seek to hedge their risk by favouring more conservative borrowers.

Keywords: COVID-19; Females; Debt; Equity; Heckman model; Blinder-Oaxaca decomposition (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: The Gender Gap in Access to Finance: Evidence from the COVID-19 Pandemic (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003512

DOI: 10.1016/j.frl.2021.102329

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