Female Skin in the Game: Bridging the Gender Financing Gap

Female Skin in the Game: Bridging the Gender Financing Gap

• Autor
• Kristine Sahakyan
• Resumo

• I examine the role of skin in the game, such as paid-up equity or collateral, in narrowing the gender financing gap in entrepreneurship. I find, first, that skin in the game reduces this gap: a 10 percent increase in collateral value raises bank debt by around 4 percent for women—twice as much as for men. Similarly, a one-standard-deviation increase in the paid-up equity ratio boosts bank debt by at least 4.65 percent more for women, which is 2.2 times more than for men. Second, I find the marginal return to an additional dollar of debt is higher for women, implying that women face more significant financial constraints and forgo higher NPV projects. The economic magnitude is large: for a female-owned business with a one-standard-deviation higher leverage, the performance gap (1-2 percentage points lower ROA for females) shrinks by at least 80 percent. 

• Palavras-chave
• Gender gap, entrepreneurship, bank debt, collateral, paid-up equity
• Modalidade
• Comunicação oral
• Área Temática
• Finanças Corporativas e Bancárias

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