THE INFLUENCE OF GENDER ON FINANCIAL DECISIONS: EVIDENCE FROM SMALL START-UP FIRMS IN SPAIN

The presence of women in management positions in companies is one of the topics that have generated the most interest and controversy over recent years. This has also been the case in Spain, where several legal initiatives have promoted the presence of women on decision-making bodies of companies. These important and pioneering legislative initiatives focus on the recommendation of positive discrimination in favour of women in large firms. This measure is justified not only for reasons of ethics or social justice, but also for the purposes of efficiency and rational economic behaviour. These laws have created an open debate in Spain and in other countries where they have been enacted and they have attracted the attention of researchers. In this context, the majority of the studies have attempted to analyse the effect of gender diversity among top managers on corporate performance of listed firms. On the contrary, this paper analyses the influence of gender on some financial decisions, using a sample of 12,376 Spanish small and micro start-up firms. Unlike previous papers, this manuscript examines not only the level of debt but also the cost and maturity of the debt. To control the endogeneity of the variables, a system of simultaneous equation with Three Stage Least Squares methodology is employed. The results show that companies run by women and boards with gender diversity tend to borrow less, have lower costs for debt and longer term debt, reinforcing the hypothesis that females are more risk averse. These results are robust for diverse measures of gender diversity (the presence of a woman as CEO, the percentage of female directors and Blau and Shannon diversity indexes).