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Girls Just Wanna Have Funds? The Effect of Women-Friendly Legislation on Women-Led Firms’ Access to Credit

Jérémie Bertrand () and Caroline Perrin ()
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Jérémie Bertrand: IESEG School of Management - LEM-CNRS 9221
Caroline Perrin: University of Strasbourg

No 2022-ACF-01, Working Papers from IESEG School of Management

Abstract: Does a women-friendly legal environment really help women overcome discrimination in credit markets? By examining antidiscrimination laws and their implications for women-led businesses' access to credit in 124 countries, the current study differentiates an effect on discouragement (i.e., not asking for credit when they need it, demand-side) and an effect on the probability that they obtain credit (supply-side). Legal protections are associated with lower women-led firms’ discouragement, but they do not attain more credit. This effect is notable with regard to emotional discouragement and prevails among smaller firms; the supply-side effect also vanishes in Muslim-majority countries. Finally, enforcement efforts dramatically amplify the effect of women-friendly laws on self-restrictions in terms of credit and enable women to access more credit. These results are robust to several tests.

Keywords: banking; gender; access to credit; borrower discouragement (search for similar items in EconPapers)
JEL-codes: G21 J71 K38 (search for similar items in EconPapers)
Pages: 43
Date: 2022-01
New Economics Papers: this item is included in nep-ban
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