# **3.b. Gender Differences in Firm Characteristics**

This section examines whether female-owned firms are different from male-owned firms in terms of size, profitability and other business and owner characteristics. Table 2 displays the differences in the average characteristics across female- and male-owned firms, along with their statistical significance. All differences control for city, region, or country fixed effects, in order to eliminate any possible confounding factors associated with the fact that some areas have a larger share of female entrepreneurs. Most of the outcome variables are in logs in order to ensure that the results are not being driven by outliers.

Table 2 shows that female-owned firms tend to be younger than male-owned firms, although this difference is only statistically significant in the Mexican and Peruvian data. In line with the results on firm size from Section 2, female-owned firms have fewer employees than male-owned firms. In the Mexican data, where most firms only have a handful of employees, the difference in employees is 9.4 percent. In the Bolivian data and in the Enterprise Surveys, female-owned firms have about 30 percent fewer employees than male-owned firms. There is no statistically significant difference in employees across female-owned and male-owned firms in the Peruvian data. However, female-owned firms in the Peruvian data are smaller than male-owned firms in terms of sales and operating costs. In the other datasets, female-owned firms also have lower sales and lower operating cost than male-owned firms. Depending on the dataset, the magnitude of the difference in sales varies from 22.6 to 103.7 percent<sup>5</sup> . All datasets except for the Peruvian data include information on property and machinery owned by the firms. Both property and machinery values are more than 50 percent lower for female-owned firms than for male-owned firms<sup>6</sup> .

The profit data displayed in Table 2 indicates that female-owned firms also have lower profits than male-owned firms in all datasets. Note that profits are not measured in logs here since this variable includes negative values<sup>7</sup> . The magnitude of the difference in average profits ranges from 15 to 20 percent of a standard deviation. The difference is statistically significant in all countries except Bolivia, possibly due to the small sample size of the Bolivian data. Since the profit variable has a lot of variation in it, I also ran a median regression for profits to check the robustness of the results to outliers, thus comparing median profits rather than average profits. The difference in median profits is also negative and is statistically significant for all datasets except the Peruvian data.

> 5 The differences in firm size across female- and male-owned firms are robust to controlling for firm age, suggesting that they do not simply reflect differences in the firms’ vintage.

> 6 In the Mexican data, only 15 percent of firms own property, and 87 percent of firms own machinery or tools. In the Bolivian data, these numbers are 44 percent and 98 percent, respectively. All firms in the Enterprise Surveys own property and machinery. The property and machinery values are conditional on owning property or machinery, respectively.

> 7 In order to ensure that results are not driven by extreme outliers, the sample excludes the firms that have profit values in the top and bottom 1 percentile for the firm’s region, industry, and size.

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