Gender-Based Credit Constraints and Firm Performance in Cameroon

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Date
2020-06-30
Authors
Johannes, Tabi Atemnkeng
Adze, Ndam Romanus
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African Economic Research consortium
Abstract
This paper revisits the empirical literature on gender and access to formal finance by enterprises and examines the effect of financial constraints on firm performance in Cameroon. Existing literature on the importance of gender of the firm’s owner as a determinant of the firm’s access to finance is clouded with mixed findings. Based on the objective measure of access to finance variable where firms are constrained if they applied and were refused, including those that did not apply because they expected to be refused. The analysis finds evidence that female-owned firms are less likely to be credit-constrained once sample selection bias is accounted for. Furthermore, unobservable heterogeneity does not explain gender difference in access to finance while using a two stage least squares regression, no significant gender gap in firm performance between male- and female-owned companies was found, though financial constraint render firms to be less efficient.
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