The Female-Firm Under-Performance Hypothesis and Gender Disparity in the Laws

Using firm-level data on developing countries, the present paper explores and extends the well-known female-firm under-performance hypothesis. Using firm-size as the measure of performance, we contribute to the literature in three important ways. First, in contrast to existing studies that focus on the gender of the owner(s), we focus on the gender of the top manager of the firm. Hence, a new dimension of female vs. male-firms is suggested. Second, we argue that the gender-based difference in firm-size in favor of men need not be uniform across countries. Specifically, we argue that it is likely to be larger in countries where laws dealing with economic activity are also more discriminatory against women relative to men. Our results confirm that is indeed the case. Third, we focus on a sample of developing countries, a rarity in the related literature