Gender Discrimination in Entrepreneurial Finance : Experimental Evidence from Ethiopia

This paper examines implicit gender bias in entrepreneurial financing by randomizing screenings of business investment ideas pitched in the format of the reality television show Chigign Tobiya. Keeping business idea and pitch quality constant, the experiment randomizes whether a female or male entrepreneur delivers the pitch across three different business sectors. The findings suggest that, on average, gender does not affect recommended investment; however, the sector matters. Some sectors attract greater investment than others. Our findings are consistent with discrimination against women in traditionally male-dominated sectors and discrimination against men in female-dominated sectors. Men are perceived as better negotiators and leaders in sectors that attract higher investment. These are also the sectors in which women are typically underrepresented. Exposure to women in leadership positions and information provided during the screenings can increase investment in women’s businesses.