IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10711.html
   My bibliography  Save this paper

Does Financial Development Reduce Gender Disparity in Top Manager Positions in Manufacturing SMEs in Developing Countries ?

Author

Listed:
  • Mohammad Amin
  • Gomez Caceres,Norma Janeth

Abstract

Women often face more hurdles than men in obtaining finance. This is especially so when credit supply is limited and financial markets are less developed. As a result, owners of firms may prefer men over women as top managers of their firms, widening the gender gap in top manager positions. This paper tests this idea using firm-level survey data for small and medium-size formal manufacturing enterprises in 47 developing countries. The results confirm a positive relationship between credit supply and the likelihood of having a woman versus a man as the top manager. This positive relationship is much stronger in industries that are more dependent on external sources of finance for technological reasons. It is also stronger in countries with poor coverage by credit bureaus and low competition between banks, which is consistent with “statistical” and “taste-based” discrimination against women borrowers. The main result is robust to several endogeneity checks, sample alterations, and alternative measures of credit supply and financial development.

Suggested Citation

  • Mohammad Amin & Gomez Caceres,Norma Janeth, 2024. "Does Financial Development Reduce Gender Disparity in Top Manager Positions in Manufacturing SMEs in Developing Countries ?," Policy Research Working Paper Series 10711, The World Bank.
  • Handle: RePEc:wbk:wbrwps:10711
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099559502262437941/pdf/IDU10d69f1e4178061466c1ad5017894d51e2cf3.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephan Klasen, 2019. "What Explains Uneven Female Labor Force Participation Levels and Trends in Developing Countries?," The World Bank Research Observer, World Bank, vol. 34(2), pages 161-197.
    2. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    3. Bruno Ćorić, 2018. "The Glass Ceiling Puzzle, Legal Institutions, and the Shadow Economy," Feminist Economics, Taylor & Francis Journals, vol. 24(4), pages 56-82, October.
    4. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    5. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    6. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    7. Isis Gaddis & Stephan Klasen, 2014. "Economic development, structural change, and women’s labor force participation:," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 639-681, July.
    8. Levine, Oliver & Warusawitharana, Missaka, 2021. "Finance and productivity growth: Firm-level evidence," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 91-107.
    9. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    10. Dutta, Nabamita & Sobel, Russell S., 2018. "Entrepreneurship and human capital: The role of financial development," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 319-332.
    11. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3-4), pages 573-588.
    12. Robert Fairlie & Alicia Robb, 2009. "Gender differences in business performance: evidence from the Characteristics of Business Owners survey," Small Business Economics, Springer, vol. 33(4), pages 375-395, December.
    13. Stephan Klasen & TU THI NGOC Le & Janneke Pieters & Manuel Santos Silva, 2021. "What Drives Female Labour Force Participation? Comparable Micro-level Evidence from Eight Developing and Emerging Economies," Journal of Development Studies, Taylor & Francis Journals, vol. 57(3), pages 417-442, March.
    14. Klasen, Stephan, 2020. "From ‘MeToo’ to Boko Haram: A survey of levels and trends of gender inequality in the world," World Development, Elsevier, vol. 128(C).
    15. Helena Marques, 2015. "Does the Gender of Top Managers and Owners Matter for Firm Exports?," Feminist Economics, Taylor & Francis Journals, vol. 21(4), pages 89-117, October.
    16. Paolo Buccirossi & Lorenzo Ciari & Tomaso Duso & Giancarlo Spagnolo & Cristiana Vitale, 2013. "Competition Policy and Productivity Growth: An Empirical Assessment," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1324-1336, October.
    17. Pham, Tho & Talavera, Oleksandr, 2018. "Discrimination, Social Capital, and Financial Constraints: The Case of Viet Nam," World Development, Elsevier, vol. 102(C), pages 228-242.
    18. Allison, Lee & Liu, Yu & Murtinu, Samuele & Wei, Zuobao, 2023. "Gender and firm performance around the world: The roles of finance, technology and labor," Journal of Business Research, Elsevier, vol. 154(C).
    19. Muravyev, Alexander & Talavera, Oleksandr & Schäfer, Dorothea, 2009. "Entrepreneurs' gender and financial constraints: Evidence from international data," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 270-286, June.
    20. Seema Jayachandran & Rohini Pande, 2017. "Why Are Indian Children So Short? The Role of Birth Order and Son Preference," American Economic Review, American Economic Association, vol. 107(9), pages 2600-2629, September.
    21. Ken S. Cavalluzzo, 2002. "Competition, Small Business Financing, and Discrimination: Evidence from a New Survey," The Journal of Business, University of Chicago Press, vol. 75(4), pages 641-680, October.
    22. Blalock, Garrick & Gertler, Paul J. & Levine, David I., 2008. "Financial constraints on investment in an emerging market crisis," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 568-591, April.
    23. Claudia Goldin, 2014. "A Grand Gender Convergence: Its Last Chapter," American Economic Review, American Economic Association, vol. 104(4), pages 1091-1119, April.
    24. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3‐4), pages 573-588, April.
    25. Gabriel Chodorow-Reich, 2014. "The Employment Effects of Credit Market Disruptions: Firm-level Evidence from the 2008-9 Financial Crisis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 1-59.
    26. Uri Gneezy & Muriel Niederle & Aldo Rustichini, 2003. "Performance in Competitive Environments: Gender Differences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 1049-1074.
    27. Aktas, Nihat & Croci, Ettore & Petmezas, Dimitris, 2015. "Is working capital management value-enhancing? Evidence from firm performance and investments," Journal of Corporate Finance, Elsevier, vol. 30(C), pages 98-113.
    28. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    29. Chang‐Tai Hsieh & Erik Hurst & Charles I. Jones & Peter J. Klenow, 2019. "The Allocation of Talent and U.S. Economic Growth," Econometrica, Econometric Society, vol. 87(5), pages 1439-1474, September.
    30. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    31. Peng, Congmin & She, Po-Wen, 2020. "Are women less likely to be managers in the UK labour market?," Economic Modelling, Elsevier, vol. 85(C), pages 317-324.
    32. Mascia, Danilo V. & Rossi, Stefania P.S., 2017. "Is there a gender effect on the cost of bank financing?," Journal of Financial Stability, Elsevier, vol. 31(C), pages 136-153.
    33. Feeny, Simon & Mishra, Ankita & Trinh, Trong-Anh & Ye, Longfeng & Zhu, Anna, 2021. "Early-Life exposure to rainfall shocks and gender gaps in employment: Findings from Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 533-554.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ewens, Michael, 2022. "Race and Gender in Entrepreneurial Finance," SocArXiv djf8z, Center for Open Science.
    2. Cody Cook & Rebecca Diamond & Jonathan V Hall & John A List & Paul Oyer, 2021. "The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers [Measuring the Gig Economy: Current Knowledge and Open Issues]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(5), pages 2210-2238.
    3. Marianne Bertrand, 2018. "Coase Lecture – The Glass Ceiling," Economica, London School of Economics and Political Science, vol. 85(338), pages 205-231, April.
    4. Saibal Ghosh, 2023. "Gender and discouraged borrowers: Evidence from India," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1731-1752, October.
    5. Martin Abel & Daniel Buchman, 2024. "The Effect of Manager Gender and Performance Feedback: Experimental Evidence from India," Economic Development and Cultural Change, University of Chicago Press, vol. 73(1), pages 307-338.
    6. Carpenter, Jeffrey & Frank, Rachel & Huet-Vaughn, Emiliano, 2018. "Gender differences in interpersonal and intrapersonal competitive behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 170-176.
    7. Khorana, Sangeeta & Webster, Allan, 2023. "Too few women at the top of firms: Foreign ownership, gender segregation and cultural causes," GLO Discussion Paper Series 1276, Global Labor Organization (GLO).
    8. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.
    9. Josep Amer-Mestre and Agnès Charpin, 2022. "Gender Differences in Early Occupational Choices: Evidence from Medical Specialty Selection," Economics Working Papers EUI ECO 2022/01, European University Institute.
    10. Giorgio Calcagnini & Annalisa Ferrando & Germana Giombini, 2015. "Multiple market imperfections, firm profitability and investment," European Journal of Law and Economics, Springer, vol. 40(1), pages 95-120, August.
    11. Dilmaghani, Maryam, 2021. "The gender gap in competitive chess across countries: Commanding queens in command economies," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 425-441.
    12. Emma Galli & Danilo V. Mascia & Stefania P. S. Rossi, 2020. "Bank credit constraints for women‐led SMEs: Self‐restraint or lender bias?," European Financial Management, European Financial Management Association, vol. 26(4), pages 1147-1188, September.
    13. Eber, Nicolas & François, Abel & Weill, Laurent, 2021. "Gender, age, and attitude toward competition," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 668-690.
    14. Czibor, Eszter & Claussen, Jörg & van Praag, Mirjam, 2019. "Women in a men’s world: Risk taking in an online card game community," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 62-89.
    15. Goodall, Amanda H. & Osterloh, Margit, 2015. "Women Have to Enter the Leadership Race to Win: Using Random Selection to Increase the Supply of Women into Senior Positions," IZA Discussion Papers 9331, Institute of Labor Economics (IZA).
    16. Afrifa, Godfred Adjapong & Tingbani, Ishmael & Adesina, Oluseyi Oluseun, 2022. "Stochastic frontier modelling of working capital efficiency across Europe," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    17. Cordoba, Juan C. & Isojärvi, Anni & Li, Haoran, 2020. "Equilibrium Unemployment: The Role Of Discrimination," ISU General Staff Papers 202011140800001116, Iowa State University, Department of Economics.
    18. Pierre Deschamps, 2024. "Gender Quotas in Hiring Committees: A Boon or a Bane for Women?," Management Science, INFORMS, vol. 70(11), pages 7486-7505, November.
    19. Paul Goldsmith-Pinkham & Kelly Shue, 2020. "The Gender Gap in Housing Returns," NBER Working Papers 26914, National Bureau of Economic Research, Inc.
    20. repec:hal:spmain:info:hdl:2441/1ta425q4ev9o6a76uep4hjlunc is not listed on IDEAS
    21. Boring, Anne & Brown, Jennifer, 2024. "Gender and choices in higher education," Economics of Education Review, Elsevier, vol. 99(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:10711. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.