Female Managers and Firm Performance in Europe

This paper builds a large pan-European panel dataset of firm-level senior management gender composition. We focus the dataset on firms in the business economy that file unconsolidated accounts and report both total assets and strict positive employment throughout their existence. We have management information for 9 million firms for the period 2005-2020 resulting in 60 million firm-year observations. Overall 40% of observations concerns firms with at least one female manager and 60% are led only by male managers. For (predominantly micro) firms with a single manager that account for 53.5% of observations, we find that only 23% are female-managed. 59.5% of firms with two or more managers have at least one female manager. Across countries between 14% and 66% of observations refer to firms where at least half of the managers are female, across industries variation is more limited and ranges between 20% and 53%. We find that within tight countryindustry- year cells women-led SMEs are smaller and less productive and show lower leverage. Real performance differences are sustained in an event study analysis of switching firms, financial performance differences are not. Female-managed firms show lower short and medium-run growth rates. These effects are small and remain unchanged (also in magnitude) when controlling for leverage. Female-managed firms do not differ in terms of exporting behaviour and responses to import shocks. We find indications that female-managed firms show lower future growth in very uncertain environments, but higher growth in environments characterized by low uncertainty.