Abstract

This paper investigates whether female leaders of firms in developing countries tend to hire more female workers. We develop a theoretical model in which female leaders increase the share of female workers by reducing statistical discrimination or taste-based discrimination against female workers. We then employ the World Bank Enterprise Survey (WBES) data for 125 developing countries over the period of 2006–2023 and find that female leaders increase the share of female workers in firms. Further analyses confirm the results, including coefficient stability test, robustness of inference to replacement, 2SLS analysis, firm fixed effects model, and the double machine learning method. We find suggestive evidence of mechanisms supporting the hypothesis that female leaders can increase female employment by mitigating statistical discrimination. However, we find no evidence supporting the hypothesis that female leaders promote female employment by alleviating taste-based discrimination.