Does Female Firm Management Affect Firm Performance? Evidence from SME Job Growth in Developing Countries

Abstract

Small and medium-sized enterprises (SMEs) contribute substantially to the economies of developing countries. Although many of the determinants of SME firm performance have been well-documented, few studies have examined the relationship between female firm leadership and firm performance. Using the World Bank’s Enterprise Survey data for 54 low- and lower-middle-income countries, this paper examines the relationship between female firm management and firm job growth. I estimate both a fixed effects model and a propensity score matching model, and find that there are generally no significant differences in job growth rates between female-managed and male-managed SMEs. These results are robust to a series of specification checks, including the addition of firm-level controls, a disaggregated regional analysis, and an alternative definition for job growth. My findings suggest that female-managed firms perform as well as male-managed firms. This evidence is particularly useful for policy advocates and practitioners seeking to expand female leadership across firms in developing countries.