Gender Gap in Corporate Reorganizations

Abstract

We study how gender affects renegotiation with creditors. Using in-court corporate reorganizations from Brazil, we identify our results by comparing the votes of male-led and female-led creditor companies within the same filing. Gender bias comes from male managers of creditor companies, who are more hesitant than their female counterparts to approve the same reorganization plan if the debtor is a female-led company. If reorganized, female-led debtor companies achieve higher survival rates and returns on assets than their male-led counterparts. Exposing male managers of creditor companies to successful cases of female entrepreneurship attenuates their gender biases. Our results uncover additional obstacles that female entrepreneurs face in their attempts to succeed.

Keywords: distressed debt, Chapter 11, Corporate bankruptcy, corporate reorganization, gender discrimination

JEL Classification: G32, G33, G38, J16, K22