Abstract/Summary

The availability of resources is paramount for innovation in women-led firms. We define a women-led firm where a chief executive officer (CEO) is a woman. We examine how nature – a pervasive and arbitrary type of institutional environment as well as access to resources is associated with different propensity to innovate between women and men-led firms. Using micro-level cross-country data of 12,412 firms and a reduced sample of 5,052 firms during 2008–2015 and across 75 economies, we find that the differences in risk perception between women and menled firms ae not associated with innovation propensity. Instead, the availability of resources proxied by a country’s fiscal freedom and availability of internal resources lead to an increase in innovation in women-led firms. The relationship is non-linear and increases with the availability of finance. This work has important policy implications for the role of institutions to spur innovation in women-led firms.