Does Gender Matter for Firm Performance? Evidence from Eastern Europe and Central Asia

53 Pages Posted: 19 Oct 2008

See all articles by Shwetlena Sabarwal

Shwetlena Sabarwal

World Bank

Katherine Terrell

Stephen M. Ross School of Business at the University of Michigan; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Gerald R. Ford School of Public Policy

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Abstract

Using 2005 firm level data for 26 ECA countries, this paper estimates performance gaps between male- and female-owned businesses, while controlling for their location by industry and country. We find that female entrepreneurs have significantly smaller scale of operations (as measured by sales revenues) and are less efficient in terms of Total Factor Productivity (TFP), although this difference is very small. However, they generate the same amount of profit per unit of revenue as men. We find that while both male and female entrepreneurs in ECA are sub-optimally small, women's returns to scale are significantly larger than men's implying that they would gain more from increasing their scale. We argue that the main reasons for the sub-optimal size of female-owned firms are that they are both capital constrained and concentrated in industries with small firms.

Keywords: entrepreneurship, finance, gender, Eastern Europe, Central Asia

JEL Classification: D24, M21, O12, O16

Suggested Citation

Sabarwal, Shwetlena and Terrell, Katherine, Does Gender Matter for Firm Performance? Evidence from Eastern Europe and Central Asia. IZA Discussion Paper No. 3758. Available at SSRN: https://ssrn.com/abstract=1286696 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Shwetlena Sabarwal (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Katherine Terrell

Stephen M. Ross School of Business at the University of Michigan ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Gerald R. Ford School of Public Policy ( email )

735 South State Street, Weill Hall
Ann Arbor, MI 48109
United States

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