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Girls Just Wanna Have Funds? The Effect of Women-Friendly Legislation on Women-Led Firms’ Access to Credit

Author

Listed:
  • Jérémie BERTRAND

    (IESEG School of Management - LEM-CNRS 9221)

  • Caroline PERRIN

    (University of Strasbourg)

Abstract

Does a women-friendly legal environment really help women overcome discrimination in credit markets? By examining antidiscrimination laws and their implications for women-led businesses' access to credit in 124 countries, the current study differentiates an effect on discouragement (i.e., not asking for credit when they need it, demand-side) and an effect on the probability that they obtain credit (supply-side). Legal protections are associated with lower women-led firms’ discouragement, but they do not attain more credit. This effect is notable with regard to emotional discouragement and prevails among smaller firms; the supply-side effect also vanishes in Muslim-majority countries. Finally, enforcement efforts dramatically amplify the effect of women-friendly laws on self-restrictions in terms of credit and enable women to access more credit. These results are robust to several tests.

Suggested Citation

  • Jérémie BERTRAND & Caroline PERRIN, 2022. "Girls Just Wanna Have Funds? The Effect of Women-Friendly Legislation on Women-Led Firms’ Access to Credit," Working Papers 2022-ACF-01, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:f202201
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    More about this item

    Keywords

    banking; gender; access to credit; borrower discouragement;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • K38 - Law and Economics - - Other Substantive Areas of Law - - - Human Rights Law; Gender Law; Animal Rights Law

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