DOES FEMALE TOP MANAGERS’ DEBT PREFERENCE SHIFT? IF FIRM EXPERIENCES SALES GROWTH

Abstract

This study seeks to investigate the gender differences indebt preference and whether firms led by female top managers shift their debt preferences when they experience rapid sales growth. The research sample consists of 18,683 firms in 98 developing countries. The data is obtained from the 2016-2018 World Bank's productivity and the investment climate survey. This study uses the robust standard error to test the relationships among variables. The results show that female top managers have a lower preference for using debt as a financing source, especially for capital goods acquisitions compared to male top managers. The findings suggest that women-led firms do not shift their debt preference even when they experience high sales growth. This study is useful for policymakers who want to develop regulations regarding female mangers decisions related to the debt financing as well as their behavior in case of high sales growth towards debt financing.