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Female leaders and financial inclusion: Evidence from microfinance institutions

Author

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  • R. Oystein Strøm
  • Bert D'Espallier
  • Roy Mersland

Abstract

This research advances the hypothesis that female leaders – chief executive officers (CEOs), chairs, and directors – of a microfinance institution (MFI) give more priority to the poorest families in loan provision than male leaders do. We differentiate between a depth and a width dimension of financial inclusion. The data set is a unique global panel of MFIs collected from MFI raters’ reports. Our sample is also unique in the sense that about one-third of all MFIs have a female CEO. The problem of endogeneity for the female leader is resolved by running Heckman’s two-step endogenous dummy variable estimation with an instrument for the female leader. We find evidence of greater depth financial inclusion (smaller average loans, more gender bias) with a female leader but not for width financial inclusion (credit client growth). Female leaders exhibit greater altruism and greater competition avoidance but not greater risk aversion than male peers.

Suggested Citation

  • R. Oystein Strøm & Bert D'Espallier & Roy Mersland, 2016. "Female leaders and financial inclusion: Evidence from microfinance institutions," Working Papers CEB 16-019, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/228650
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    Cited by:

    1. Zamore, Stephen, 2018. "Should microfinance institutions diversify or focus? A global analysis," Research in International Business and Finance, Elsevier, vol. 46(C), pages 105-119.

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    More about this item

    Keywords

    Female leadership; financial access; microfinance institutions; cross-country panel data;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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