Gender and Corporate Success: An Empirical Analysis of Gender-Based Corporate Performance on a Sample of Asian Small and Medium-Sized Enterprises

27 Pages Posted: 16 Oct 2019

See all articles by Farhad Taghizadeh-Hesary

Farhad Taghizadeh-Hesary

Waseda University

Naoyuki Yoshino

Asian Development Bank Institute

Lisa Fukuda

University of Queensland

Date Written: March 26, 2019

Abstract

Within a patriarchal society, women are placed in a precarious societal positioning that leads to a prevalence of gender inequality in education, financial literacy, and access to finance. In the context of Asia, where small and medium-sized enterprises (SMEs) are the backbone of most Asian economies and the financial sector is dominated by banks, women in entrepreneurship are susceptible to facing greater credit constraints relative to their male counterparts, which can compromise their corporate performance. We investigate whether there is a significant association between gender and success or failure of SMEs. Using a statistical analysis technique (principal component analysis) and running econometrics regressions on a random sample of 1,492 exporter SMEs from Iran, the research answers the question: is it plausible to conclude that female-owned SMEs are bound for lower corporate performance relative to those of male counterparts? Empirical results show that indeed, despite showing a good leverage status, female-owned SMEs perform lower relative to male counterparts as they have a higher default ratio and lower profitability, liquidity, and coverage. We provide policy suggestions, such as establishment of credit guarantee funds for easing the female-owned SMEs’ access to finance in Asia. Implementation of supportive policies for female-owned SMEs will have significant contribution to economic growth, employment, and ultimately, to gender equality.

Keywords: economics of gender, small and medium-sized enterprises, corporate performance of SMEs, financial literacy gap, access to finance, gender inequality, financial inclusion

JEL Classification: J16, G32, G21

Suggested Citation

Taghizadeh-Hesary, Farhad and Yoshino, Naoyuki and Fukuda, Lisa, Gender and Corporate Success: An Empirical Analysis of Gender-Based Corporate Performance on a Sample of Asian Small and Medium-Sized Enterprises (March 26, 2019). ADBI Working Paper 937, March 2019. Available at SSRN: https://ssrn.com/abstract=3470028

Farhad Taghizadeh-Hesary (Contact Author)

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
tokyo, 169-8050
Japan

Naoyuki Yoshino

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Lisa Fukuda

University of Queensland

St Lucia
Brisbane, Queensland 4072
Australia

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