STEG Working Paper

Misallocation across Establishment Gender

Ashantha Ranasinghe


I find substantial differences in the extent of misallocation across male and female-led establishments spanning many low and middle-income countries. In South American and South Asian countries female establishments face higher distortions to operating a business, whereas in Eastern European countries male establishments face higher distortions. These differences across gender hold when controlling for relevant establishment characteristics. Across countries, economic development is negatively related with female establishments facing higher distortions and misallocation, and is primarily from distortions on capital. Removing distortions across gender increases female market shares and average size, especially in poorer countries.

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