The Gender Gap in Access to Finance: Evidence from the COVID-19 Pandemic

Nirosha Wellalage (), Sabri Boubaker, Ahmed Hunjra () and P. Verhoeven
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P. Verhoeven: QUT - Queensland University of Technology [Brisbane]

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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. \textcopyright 2021 Elsevier Inc.

Keywords: Blinder-Oaxaca decomposition; COVID-19; Debt; Equity; Females; Heckman model (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

Published in Finance Research Letters, 2022, 46, ⟨10.1016/j.frl.2021.102329⟩

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Journal Article: 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:hal:journl:hal-04452673

DOI: 10.1016/j.frl.2021.102329

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