Table 2: Gender gaps in credit access

||Credit<br>application|Credit<br>rejection|Credit<br>constraint|Has open<br>line of credit|Log(debt)|
|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|
|_A. All countries_||||||
|Female|0.03|-0.053|-0.059|0.043|-0.489|
||[0.022]|[0.027]*|[0.019]***|[0.020]**|[0.196]**|
|Obs|21,411|3,144|21,411|21,411|3,222|
|R2|0.233|0.382|0.202|0.286|0.398|
|_B. By social perceptions about women_||||||
|Female in less traditional countries|0.015|-0.021|-0.048|0.051|-0.394|
||[0.032]|[0.034]|[0.022]**|[0.032]|[0.196]**|
|Female in more traditional countries|0.045|-0.109|-0.071|0.036|-0.727|
||[0.029]|[0.034]***|[0.028]**|[0.022]|[0.406]*|
|Obs|21,411|3,144|21,411|21,411|3,222|
|R2|0.233|0.383|0.202|0.286|0.399|

Sources: World Bank Enterprise Surveys and World Value Surveys. Notes: The sample includes 61 countries, of which 28 are classified as more traditional and 33 as less-traditional when using median of the WVS indicator as threshold. All models control for manager experience, indicators of firm age, legal status, size, whether the firm exports, whether it has financial statements certified by external auditors, the percentage of the firm that is privately owned, and industry, country, and year fixed effects. For the model of credit application rejection, controls also include firm leverage. Models in columns (1), (3) and (4) use all firms in our sample; model in column (2) restricts the sample to firms reporting the result of their most recent credit application; model in column (5) restricts the sample to firms with open lines of credit that report the value of their debt. Standard errors are clustered at the country level. *** significant at 1%, ** at 5%, * at 10%.

if these firms are riskier, less profitable or less productive. Estimations presented in Table 3 suggest that there is no evidence of gender differences in leverage, that is, the debt-to-capital ratio, a measure of a firm’s risk. These results are generally consistent in both more and less traditional countries (Panel B).<sup>19</sup> While female-managed firms have comparable risks, they are relatively more profitable (column 2) and have no discernible differences in TFP (column 3) in both more traditional and less traditional countries. Female-managed firms have, on average, a profitability ratio that is 0.14 standard deviations above a country’s mean value relative to those managed by men. This result may help explain the lower credit application rejection rates for female-managed firm. However, female-managed firms have lower sales per worker compared to their male counterparts (column 4), potentially attributed to factors such as limited business networks and challenges in accessing product or labor markets (Campos et al., 2019; Gonzalez-Uribe and Ouafaa, 2022).<sup>20</sup>

> 19Female-managed firms are smaller and it could be that they rely on personal assets to secure finance, biasing our estimations. We test whether our results hold for larger firms, that is, those with capital value above the sample median. We find that our results continue to hold even in this restricted sample of larger firms (Table A.6 in the Appendix). 20Our results are broadly consistent across alternative samples of firms, that is, (i) those that apply for credit; (ii) those whose credit application are rejected; and (iii) those that get the loans. Results are available upon request.

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