Female Managers, Women's Employment, and Gendered Laws

Using a large cross‐country dataset from the World Bank Enterprise Survey, we show that firms with female top managers employ more women, are more likely to provide female employees with job training, childcare support, and maternity benefits, and, in an Islamic‐country context, exhibit lower levels of gender discrimination. The positive effect of female leadership on women's employment is stronger in countries with weaker legal gender equality and limited institutional support for women in business, but weaker in male‐dominated industries. We further find that the share of female employees mediates the negative association between female leadership and firm productivity. Nevertheless, we find that female‐led firms underperform comparable male‐led peers with similar shares of female employees, suggesting that the gender gap in firm performance is still driven by managerial factors other than employee gender composition.