Does Corporate Political Activity (Really) Reduce Discouragement? The Paradox of Women-Led Firms

32 Pages Posted: 29 Feb 2024

See all articles by Jeremie Bertrand

Jeremie Bertrand

Catholic University of Lille - IÉSEG School of Management, Lille Campus; CNRS - Lille Economics & Managment - UMR 9221

Caroline Perrin

Utrecht University

Abstract

This study examines the interplay between corporate political activity, gender, and borrower discouragement in credit markets, focusing on women-led firms worldwide. Employing data from 22,822 firms across various countries, it challenges the conventional belief that political connections invariably facilitate credit access. Surprisingly, women-led firms with political ties exhibit increased discouragement, primarily due to heightened awareness of gender biases and structural barriers in the credit market—a consequence of the "know-how" aspect of political connections. The study also uncovers the conditional nature of these connections; in environments with strong legal protections, the discouragement effect diminishes, whereas it intensifies in less supportive socio-legal contexts and in highly unequal environments.

Keywords: banking, gender, political connection, borrower discouragement

Suggested Citation

Bertrand, Jeremie and Perrin, Caroline, Does Corporate Political Activity (Really) Reduce Discouragement? The Paradox of Women-Led Firms. Available at SSRN: https://ssrn.com/abstract=4743152 or http://dx.doi.org/10.2139/ssrn.4743152

Jeremie Bertrand (Contact Author)

Catholic University of Lille - IÉSEG School of Management, Lille Campus ( email )

3 rue de la Digue
Lille, 59000
France

CNRS - Lille Economics & Managment - UMR 9221 ( email )

Lille
France

Caroline Perrin

Utrecht University ( email )

Vredenburg 138
Utrecht, 3511 BG
Netherlands

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