Female top managers and firm performance

Abstract

This paper uses firm-level data worldwide to investigate productivity gaps between female and male-managed companies in developing and developed countries and compare the outcomes obtained for different regions in the world. The main aim is to shed some light on the debate around the existence of performance differences when females participate in managerial activities. The main results indicate that it is crucial to distinguish between female management and female ownership and the confluence between both. We find that when the firms have a top female manager and ownership is exclusively male, firms show higher average labor productivity. We argue that firms owned by males belong to male-dominated corporate culture and would only select a female manager if she is more competent than potential male candidates. These results are very heterogeneous among regions, of which South Saharan Africa, East Asia, and South Asia are driving the main results.