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

Author

Listed:
  • Nelli S. Gazanchyan
  • Nigar Hashimzade
  • Yulia Rodionova
  • Natalia Vershinina

Abstract

We present a theoretical and empirical analysis of the links between the gender of an entrepreneur, access to finance, occupational choice, and business performance. Our theoretical model predicts that, when lenders discriminate against women entrepreneurs, the average entrepreneurial skill of women who become entrepreneurs or enter paid employment as managers is higher than that of their men counterparts. This suggests that the firms owned or managed by women should perform better than the firms owned or managed by men, ceteris paribus. We find empirical support for the assumptions and the predictions of our model using firm-level data for 28 emerging economies in Europe and Asia; the effect is especially strong in the small and medium enterprises, possibly, because in large firms borrowing is a less essential source of finance. An important policy implication of our findings is that discrimination in the capital market spills over to the labour market, leading to the distortion of occupational choice and inefficiency in allocation of physical and human resources.

Suggested Citation

  • Nelli S. Gazanchyan & Nigar Hashimzade & Yulia Rodionova & Natalia Vershinina, 2017. "Gender, Access to Finance, Occupational Choice, and Business Performance," CESifo Working Paper Series 6353, CESifo.
    • Handle: RePEc:ces:ceswps:_6353
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    References listed on IDEAS

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    1. repec:ces:ifodic:v:15:y:2017:i:2:p:22-25 is not listed on IDEAS
    2. Nigar Hashimzade & Natalia Vershinina, 2017. "Symptoms and Causes: Gender Effects and Institutional Failures," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(02), pages 22-25, August.
    3. repec:ces:ifodic:v:15:y:2017:i:2:p:19337557 is not listed on IDEAS

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    More about this item

    Keywords

    occupational choice; discrimination; finance; gender; small and medium enterprises;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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