By Jane Korinek & Annabelle Mourougane & Elisabeth van Lieshout
International trade is a major driver of economic growth, with exporting firms earning greater profits, paying higher wages, and growing faster than non-exporting firms. But women entrepreneurs are less likely to engage in international trade, leaving them unable to capitalise on such benefits. This column analyses the factors inhibiting women-led firms from trading internationally and suggests policies to overcome them. Ensuring that businesses led by women are able to take advantage of international trade will foster gender equality, help close gender wage gaps, and contribute to more inclusive economic growth.
Across OECD countries, international trade is a major driver of economic growth. Exporting firms earn higher profits, pay higher wages, and grow faster than non-exporting firms (Redding and Melitz 2023, Baldwin and Yan 2015, Melitz and Redding 2015, Schank et al. 2007, Singh 2010, Bernard and Jensen 1999, Bernard et al. 2007). Evidence from the Meta-OECD-World Bank Future of Business Survey undertaken in March 2022 suggests that women entrepreneurs are less likely to engage in international trade, and, as a consequence, are less able to seize opportunities for increasing competitiveness and the other spillover effects international trade offers. Because women are more likely to lead firms in service sectors, and their firms tend to be smaller and younger, they are generally less likely to trade internationally. However, about a third of the gender exporting gap cannot be explained by firms’ features, and instead seems to be associated with factors related to gender differences.
Ensuring that businesses led by women entrepreneurs are able to take advantage of these opportunities will foster gender equality and help to close gender gaps that increased during the COVID-19 pandemic, in addition to contributing to greater and more inclusive economic growth (Ostry and Lagarde 2018). Focusing on this specific category of firms can also help to better tailor policies.