# **2.2 Contextual data**

A novelty of our analysis is the distinction of gender disparities in firms’ financial access, performance, and capital misallocation across countries that differ in their gender and cultural norms. We classify countries by their level of traditionality based on social perceptions about the role of women using data from the World Value Survey (WVS). To construct our measure of social perceptions towards women, we experimented with several variables from WVS, but narrowed down to the variable answered by countries that overlap with the coverage in the WBES dataset. This variable measures the level of agreement with the statement “When jobs are scarce, men should have more right to a job than women”. The variable is also used in other studies such as Li (2021) to measure gender norms.<sup>7</sup> For each country, the share of adults who agree or strongly agree with the statement in the initial year of WVS is computed. Traditional countries are defined as those having this share of adults above the cross-country median value. For robustness checks, we experiment with different thresholds such as terciles as well as an alternative outcome-based measure, that is, female labor force participation (see Section 3.3).

# **2.3 Sample cleaning**

Before proceeding with the analysis, we make the following adjustments to the sample. _First_ , we restrict our firm sample to countries with available complementary data on societal attitudes toward women and female labor outcomes noted in Section 2.2. _Second_ , we restrict the sample to firms with fewer than 1,000 full-time employees who report positive values for sales, labor, intermediate inputs, and capital.<sup>8</sup> Our final sample includes 61 countries and 21,411 observations after dropping observations with missing values in our variables of interest.<sup>9</sup> In our sample of 61 countries, 28 are classified as more traditional and 33 as less traditional, when using the median of the WVS indicator as the threshold. Table A.1 in the Appendix provides details on variable definitions.

# **2.4 Descriptive stylized facts**

In this subsection, we report some interesting stylized facts, using unconditional means, that emerge from our sample comprising 61 countries.

**Stylized Fact #1** : The share of female-led firms is significantly smaller than male-led ones, and more so in traditional countries. Using the gender of the firm’s top manager as a criterion for measuring female leadership, 14% of the firms in our sample are led by women, with this percentage varying from 12% in more traditional countries to 17% in less traditional ones. By comparison, in the United States, 23% of firms have a female active owner (Morazzoni and Sy, 2022),<sup>10</sup> while 21% of firms have a female solo entrepreneur or a female decision maker in Spain (de Andrés et al., 2021) and Italy (Basiglio et al., 2023) respectively.<sup>11</sup> In India, data drawn from the fourth round of the Micro,

> 7In addition to this, we also considered the following questions: “Being a housewife is just as fulfilling as having a paid job”; “A woman has to have children to be fulfilled”; “University is more important for a boy than for a girl”; and “A pre-school child suffers with working mother”, but they are constrained by the overlap with WBES country coverage.

> 8We define the sample of interest following Ranasinghe (2024). By selecting firms with fewer than 1,000 full-time employees, we drop 240 firms representing only 1% of the total number of firms in the final sample.

> 9Table A.2 in the Appendix lists the countries, sample size, and years with available data. 10In our sample 11% of firms has at least one female owner.

> 11The numbers for Italy are for small firms (fewer than 50 employees) and these figures stand at 6% and 7% for medium

5