The Gender Gap in Firm Leadership:
The Role of Religion, and its Impact on Firm Growth
This paper studies the phenomenon of gender gap in leadership jobs around the world. I first investigate the drivers of the gap and show that religions strongly affect the geographical distribution of women-led firms. Among others, Buddhism is a strong predictor of female leadership in firms: A 10 percent increase in Buddhist share would result in a 2.8 percent increase in female top managers. I test the underlying mechanisms and show that the impact mainly works through a more gender-inclusive culture. To understand the economic consequences of the gender gap in top leadership, I use worldwide firm data to study female top manager’s impact on firm outcomes, in which I distinguish two distinct sources of growth: gains in productivity through innovation (intensive growth) and growth from quantitative increases in labor, capital, and land (extensive growth). The results show that women-led firms are significantly more innovative and have higher productivity, suggesting that female top managers do a better job facilitating intensive growth. However, they are less likely to invest in extensive margins: women-led firms have lower employment growth and investment despite equal access to capital and land. My findings help reconcile the ongoing debate on gender and firm performance by showing that men and women both contribute to firm growth via different margins. Taking all results together, my findings suggest that the current gender status in firm leadership suppresses a strong source of economic growth, especially in developing countries that want a transformation of economic development approach from extensive growth to intensive growth.