Gender Bias in Access to Finance, Occupational Choice, and Business Performance

Nigar Hashimzade and Yulia Rodionova ()
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Yulia Rodionova: Leicester Business School, De Montfort University

No em-dp2013-01, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: We analyze, in a model of occupational choice in the labour market and discrimination in the capital market, the relationship between the gender of the owner and of the top manager of a firm, access to finance, and this firm's performance. Occupational choice serves as the link from the capital market to the labour market. The model predicts that if the lenders discriminate against female entrepreneurs, then the conditional average of entrepreneurial skill of female business owners and female top managers is higher than that of their male counterparts. We find empirical evidence in support of our model using firm-level data from the 2009 wave of the Business Environment and Enterprise Performance Survey (BEEPS) for twenty six emerging economies in Eastern Europe and Central Asia. Specifically, we find evidence of discrimination of women in the capital market. Furthermore, we find a positive effect of the female gender of a business owner and of a business top manager on business performance, after controlling for various factors, including possible constraints on access to external finance. The positive effect of a female top manager is mitigated if the firm is owned by a female, suggesting decreasing return to skill, or if it operates in certain industries where female leadership may be of special value, which could be an additional factor in the occupational choice.

Keywords: discrimination; finance; gender; occupational choice; small and medium enterprises (search for similar items in EconPapers)
JEL-codes: G20 J16 J24 L25 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2013-04-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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