Gender and Firm Performance around the World: The Roles of Finance, Technology, and Labor

Using the World Bank Enterprise Survey (WBES) data from 2006-2017 on 130,000 firms in 130 countries across the globe, we document that women-led firms tend to underperform men-led firms. The main contribution of this work is to shed light on three mechanisms that help explain the underperformance: finance, technology, and labor. First, women-led firms are investing less in fixed assets and obtaining less credit from banks. Second, women-led firms are less likely to use information technology to manage their businesses. Third, women-led firms tend to employ more skilled and educated workers, and are more likely to provide workers with permanent contracts, hence incurring higher labor costs. Interestingly, in our data, women top managers do not perceive themselves facing more business obstacles than their male counterparts do.