# **5. Robustness Checks**<sup>**8**</sup>

As it was mentioned before, we use a PSM<sup>9</sup> (see Table 7) where the treatment is being part of a GVC. Clearly, this method assumes that the selection to be treated (being part of GVC) is based on observables only. The average treatment effect shows that the positive effect on female ownership (for GVC1), female employees and female production workers and the negative one on female top manager (for GVC1) are similar to those of the baseline regression (in Table 3). Matching statistics and the results are presented in Appendix 4. Tables A9-A15 shows that there is a high level of common support for the two definitions of GVC and for the total sample and the MENA region. This is also confirmed by Figure A2 and A3. Thus, our PSM results converge to those of the baseline.

<u>Table 7. GVCs and Female Labor Force Participation – PSM</u>

|||||(a) All reg|ions||||
|---|---|---|---|---|---|---|---|---|
||Fem. O|wnership|Fem. To|p Manager|Fem. E|mployees|Fem. Prod|. Workers|
||GVC1|GVC4|GVC1|GVC4|GVC1|GVC4|GVC1|GVC4|
|ATE|0.028***|-0.026|-0.007|0.021|0.088***|0.539***|0.274***|0.241**|
||(0.0066)|(0.0435)|(0.005)|(0.030)|(0.027)|(0.108)|(0.027)|(0.126)|
|ATT|0.011**|-0.096***|-0.012***|-0.007|0.107***|0.435***|0.337***|0.333***|
||(0.006)|(0.012)|(0.004)|(0.009)|(0.023)|(0.094)|(0.031)|(0.062)|
|Observations|83,949|83,949|84,341|84,341|41,227|41,227|41,237|41,237|
|||||(b)MENA<br>|region<br>||||
||Fem. O|wnership|Fem. To|p Manager|Fem. E|mployees|Fem. Prod|. Workers|
||GVC1|GVC4|GVC1|GVC4|GVC1|GVC4|GVC1|GVC4|
|ATE|0.012|-0.091**|-0.021***|-0.029**|0.235***|0.236|0.250***|0.110|
||(0.012)|(0.041)|(0.005)|(0.013)|(0.079)|(0.351)|(0.062)|(0.302)|
|ATT|0.036***|-0.056*|-0.005|-0.003|0.260***|0.650*|0.490***|0.435**|
||(0.014)|(0.033)|(0.006)|(0.019)|(0.069)|(0.350)|(0.106)|(0.222)|
|Observations|11,714|11,714|11,730|11,730|4,861|4,861|6,864|6,864|

Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Note: All the regressions include country, year and sector dummies.

Moving to the second robustness check, an Instrumental Variable approach (IV) is used in order to control for the endogenous characteristics of firms’ integration into GVC. A shift-share of GVC aggregated by country-year-sector-geographical zone minus the firm’s own integration into GVC is used as an instrument. GVC corrected from individual firm idiosyncrasies is expected to affect firms’ trade performance without having any direct impact on women’s participation <mark>. Table 8 shows that our results regarding the positive effect on female ownership and female production workers are robust and become stronger. Hence, our previous estimates</mark> of GVC must be interpreted as lower bounds due to the downward bias resulting from the endogeneity problem. Moreover, the effect of GVC on top management is still insignificant. When the same IV approach is applied to the MENA region, we find a positive effect of GVC on female owners and female workers (especially production ones), with an insignificant impact on female managers. This

> 8 Results of IV-First Stage are presented in Table A6 in Appendix 4. Results of IV regressions for Non-Production Workers are presented in Table A7.

> 9To check the robustness of the results, propensity scores are estimated using alternative matching methods with different choice of bandwidths (Kernel pair matching with replacement and cross validation with respect to the means of x). Matching statistics and the results are presented in Appendix 5.

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