Gender and firm performance around the world: The roles of finance, technology and labor

We study the effect of having a female top manager (FTM) on firm performance using World Bank Enterprise Survey data that cover 130,000 firms in 130 mostly developing countries from 2008 to 2017. We show that firms with FTMs underperform their male-led counterparts. FTMs' underperformance is largely driven by small and medium-sized enterprises and varies widely across world regions. FTMs influence firm performance through affecting firms' three critical factors of production, which are finance, technology, and labor. Our mediation analyses indicate that the negative FTM-performance relation can be partially mediated by firms' access to finance, technology usage, and labor selection, which are proxied by lines of credit, internet purchases, and labor cost, correspondingly. This study synthesizes the leadership literature, extends upper echelon and social role theories, and brings clarity to the equivocal findings in the literature on the relation between female leadership and firm performance.