Gender and corruption in firms: The importance of regional context

Abstract

The idea that there are gendered differences in corruption in the political arena is common. Two explanations for these differences include risk aversion and network effects. However, business leaders include a self‐selected group of individuals that are comparatively risk‐tolerant and well‐connected. Using firm‐level data for 144 countries from 2006 to 2019, we test whether female‐run businesses engage in corruption differently than men. In the aggregate, we find a potentially puzzling result: female‐managed firms are engaged in less corruption and report it being less of an obstacle compared to their male counterparts; female‐owned firms are just the opposite. Once we disaggregate the data into region specific estimates, a clearer pattern emerges. Corruption is more harmful for female‐run firms in the areas of the world that have more gender inequality overall.