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

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  • Hewa-Wellalage, Nirosha
  • Boubaker, Sabri
  • Hunjra, Ahmed Imran
  • Verhoeven, Peter

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.

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  • Hewa-Wellalage, Nirosha & Boubaker, Sabri & Hunjra, Ahmed Imran & Verhoeven, Peter, 2022. "The gender gap in access to finance: Evidence from the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 46(PA).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003512
    DOI: 10.1016/j.frl.2021.102329
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    1. Bátiz-Zuk Enrique & González-Holden Alexa, 2023. "Identifying Gender Disparities on the Time to Repay Microfinance Group Loans: Evidence from Mexico," Working Papers 2023-07, Banco de México.

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