ENTERPRISE S URVEYS
ENTERPRISE NOTE S ERIES
GENDER
Female Top Managers in Malaysia
2018
Mohammad Amin and Amanda Zarka
R
ecent rm-level survey data collected by the World Bank’s Enterprise Surveys (ES) shows that
about a quarter of all Malaysian rms have a female top manager. Female top managers are
more likely to be found in large rms than in small rms, in the retail sector vs. the rest of the
economy, and in exporting than in non-exporting rms. In contrast to what the literature might
suggest, in Malaysia, rms with a female top manager have higher labor productivity on average than
rms with a male top manager. However, the business environment, along several important
dimensions such as the regulatory burden, corruption, and the crime and security environment, is
ENTERPRISE NOTE No . 36
more di cult for rms with female top managers.
Introduction Malaysian firms are more likely to have a
Gender inequality is an issue that persists in every female top manager than firms in
country around the world (Hausmann et al., 2006). In upper-middle-income countries
rms, gender inequality at the managerial level occurs Over a quarter of all rms in Malaysia have a female
when men receive a disproportionate share of managerial top manager. is is signi cantly higher than upper- and
positions, greater job security, and higher wages, among lower-middle-income countries, where only 17 percent
other things. Studies show that women tend to be and 19 percent of the rms have a female top manager,
respectively ( gure 1). However, Malaysia still falls
concentrated in low-paying and vulnerable jobs, and are
signi cantly behind the EAP region, where on average 40
less likely to be found in dynamic and high-paying percent of the rms have a female top manager. Within
positions such as CEOs and managers of companies the EAP region, Malaysia only outperforms Indonesia and
(World Bank 2011, Elson 1999, Blau and Kahn 2003). Vietnam, although not signi cantly so, where only 22
Using the World Bank’s Enterprise Survey (ES) data,1 percent of rms have a female top manager. All these
this Enterprise Note analyzes various issues related to results continue to hold qualitatively even after
private rms in Malaysia having a female (vs. male) top accounting for di erences in basic rm characteristics
manager, i.e. the main decision-maker. Malaysia’s mentioned above. In short, while Malaysia has a
reasonable share of female top managers by international
experience is benchmarked against the average across
standards, the regional experience suggests it could do
WORLD BANK GROUP
countries for the following comparator groups: countries even better.
in the East Asia & Paci c (EAP) region,2 upper-
middle-income countries, and lower-middle-income Over a quarter of Malaysian firms
Figure 1
countries.3 Unless otherwise stated, all gures and have a female top manager
discussion below refer to the private sector as covered by
% of firms with a female top manager
45
40%
the ES. Results discussed for Malaysia and the comparator 40
groups are based on regression analysis. e statistical 35
30
signi cance of the results, and their robustness with 26%
25
regards to di erences in basic rm characteristics, which 20 17%
19%
include rm size (log of number of employees), age of the 15
rm, percentage of foreign ownership of the rm, and the 10
5
industry to which the rm belongs, are discussed.
0
roughout, the term “signi cant” or “signi cantly” Malaysia EAP Upper-middle Lower-middle
income income
means statistical signi cance at the 10 percent level or less.
Source: Enterprise Surveys (various years).
Figure 2 Greater gender parity in tertiary Figure 3 Large firms in Malaysia are much more
education is associated with a higher likely to have a female top manager
percentage of firms with a female than small- and medium-sized firms
top manager
45
41%
% of firms with a female top manager
60 41%
% of firms with a female top manager (residuals)
40
50 35% 34%
35
40
30
27%
25%
30 25
21%
20 18%
20
16% 15%
MYS
15 13%
10
10 9%
0
-0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00 5
-10 0
Malaysia EAP Upper-middle Lower-middle
-20 income income
-30
Small (<20 workers) Medium (20 to 99 workers) Large (100+ workers)
Gender parity in tertiary education (residuals)
Source: Enterprise Surveys and World Development Indicators, World Source: Enterprise Surveys (various years).
Bank (various years).
Note: “MYS” in the figure denotes Malaysia. The graph is a partial scatter
plot of the relationship between the percentage of firms with a female top
manager in the country and gender parity in tertiary education. The
relationship is obtained after controlling for differences in GDP per capita
(log values). The positive relationship shown in the figure is statistically
significant at the 1 percent level.
For its level of education among women large rms are more visible, and hence less likely to
discriminate against women candidates for the top
relative to men, Malaysia outperforms other
manager position. However, it is also possible that large
countries in the proportion of rms are more hierarchical – making it di cult for
female-managed firms women to reach the top managerial position, as they often
Education is one of the most important determinants fall behind men in networks, training, and relevant job
of a women’s career path. erefore, education is key to experience.
closing the gender gaps in income and employment e ES data show that in the case of Malaysia, there is
(World Bank 2011). For higher levels of gender parity in a positive and signi cant relationship between rm-size
tertiary education, we expect the percent of female top (log of number of employees) and the tendency of having
managers to increase signi cantly (see Amin and Islam a female top manager. Close to 41 percent of large rms in
2016). is positive and signi cant relationship is shown Malaysia have a female top manager as compared with
in gure 2, and it continues to hold even after accounting only 25 percent of small-sized rms and 27 percent of
for di erences in GDP per capita across countries and medium-sized rms ( gure 3). In contrast, the stated
basic rm characteristics.4 e relationship is stronger in relationship is the opposite in the comparator groups and
Malaysia than in other countries. at is, as more females statistically signi cant except for the EAP region ( gure
receive tertiary education (relative to men), even more are 3). All the results discussed in this paragraph continue to
hired as top managers in Malaysia than in other countries. hold even after accounting for di erences in basic rm
characteristics.
Bucking the international trend, large firms in
Malaysia are more likely to have a female top Like other countries, retail firms in Malaysia
manager than small firms are much more likely to have a female top
manager than firms in manufacturing and
Firm-size is considered an important proxy measure
and determinant of various rm characteristics. For other services sectors
instance, large rms – measured by annual sales or A large literature exists on the segregation of men and
number of employees – are often associated with greater women workers by occupation as well as industry (World
exporting activity, innovation and R&D, productivity etc. Bank 2011, Hsieh et al. 2013, Randall 2012). In fact,
However, it is not clear how rm-size a ects the tendency using the ES data for a large cross-section of countries,
of having a female top manager. One possibility is that Amin and Islam (2014) report that the tendency of having
2
a female top manager is much higher in the retail sector Corruption is another important area where rms
than in the rest of the economy (other services and with a female top manager in Malaysia fare worse. In the
manufacturing). is holds in Malaysia too, where about ES, respondents were asked if rms pay bribes to public
35 percent of retail rms have a female top manager, o cials to “get things done” as well as how much. A
signi cantly higher than the 21 percent of rms in the rest signi cantly higher proportion of rms with a female top
of the economy (28 percent in manufacturing and 20 manager in Malaysia reported paying such bribes,
percent in the other services sectors). e comparator compared with rms with a male top manager (36 percent
groups exhibit a similar result, except for the EAP region vs. 17 percent). Although the di erence is not signi cant,
where the di erence is not signi cant. Moving beyond bribes paid as a percentage of rms’ annual sales is
sectors, one area where Malaysia stands out over quantitatively much higher for rms with a female top
comparators is the signi cantly higher proportion of rms manager than a male top manager (7 percent vs. 3
with a female top manager among exporters (43 percent) percent). In contrast, in the comparator groups, the
compared with non-exporters (24 percent). In contrast, gender-based gap for both the corruption variables is
comparator groups do not show any noticeable di erence much smaller, insigni cant, and often favors rms with a
in these proportions. Accounting for di erences in the female top manager. Figure 4B illustrates the point. e
basic rm characteristics does not make any qualitative ndings for corruption for Malaysia and the comparator
di erence to the ndings discussed in this paragraph. countries remain qualitatively unchanged even after
accounting for di erences in basic rm characteristics.
Firms with a female top manager experience a In terms of crime and security, rms with a female top
more difficult business environment than firms manager in Malaysia are more likely to experience crime
with a male top manager in several ways and spend on security, than rms with a male top
manager; as a percentage of rms’ annual sales, losses due
e ES data show that for several business to crime as well as expenses on security are higher for rms
environment measures, rms with a male top manager in with a female top manager than a male top manager.
Malaysia enjoy a better business environment than rms While these gender-based di erences are quantitatively
with a female top manager. First, the time tax – an overall large, they are not always statistically signi cant. For
measure of the regulatory burden on private rms – is instance, losses due to crime equal 2.4 percent of annual
signi cantly higher for Malaysian rms run by females sales for a typical rm with a female top manager
than males (7.1 percent vs. 2.9 percent, respectively). e compared with 1.2 percent for a rm with a male top
time tax is higher for female-managed rms in the upper- manager. e di erence is quantitatively large but not
and lower-middle-income countries and lower in the EAP signi cant. For the comparator groups, the results are
region, but these di erences are quantitatively small and mixed, as rms with a female top manager face tougher
not signi cant ( gure 4A). Accounting for di erences in crime and security situations in some cases and better
basic rm characteristics does not make any di erence to situations in others. However, these gender-based
the qualitative nature of the results discussed above for the di erences are typically small in magnitude and
time tax. statistically insigni cant.
Figure 4 Firms with a female top manager in Malaysia exhibit a higher regulatory burden and seem to
face greater corruption than firms with a male top manager
Figure 4A Figure 4B
Bribes firms pay to get things done as %
of their annual sales (firm-level average)
% of firms' senior management's time
16 14.3% 8
6.8%
spent in dealing with goverment
13.2%
regulations (firm-level average)
14 7
11.3%11.7%
12 6
10 8.6% 5
7.6%
8 7.1%
4
3.0%
6 3
2.0% 1.8%
4 2.9% 2
1.0% 1.0%
2 1 0.6% 0.7%
0 0
Malaysia EAP Upper-middle Lower-middle Malaysia EAP Upper-middle Lower-middle
income income income income
Male-managed firms Female-managed firms Male-managed firms Female-managed firms
Source: Enterprise Surveys (various years).
3
For instance, in Malaysia, the combined crime losses – the so-called “female rm under-performance
and security expenses for a typical rm with a female top hypothesis”. Possible explanations could be the relatively
manager and with a male top manager equals 6 percent small size of female-owned or -managed rms,
and 2.2 percent, respectively. e gender-based gap in the discrimination that women often face in access to nance
comparator countries is much smaller where the and public infrastructure facilities, social norms and laws
corresponding gures (for rms with a female or male top that often favor men over women, and providing care at
manager, respectively) are 1.4 percent and 1.8 percent in home that is largely borne by women. However, most of
the EAP region, 2.2 percent and 2.1 percent in the this literature focuses on developed rich countries (see
upper-middle-income group, and 4.1 percent and 3.9 Robb and Wolken 2002, Sabarwal and Terrell 2008).
percent in the lower-middle-income group. e e ES shows that in the case of Malaysia, labor
qualitative nature of the results discussed in this paragraph productivity as de ned by annual sales per worker is much
does not change when accounting for di erences in basic higher for rms with a female rather than a male top
rm characteristics. manager (USD 17,965 and USD 12,369, respectively;
median values). is holds despite the fact that
A comprehensive measure of credit-constrained rms
female-managed rms face a more di cult business
that factors in why rms do not apply for loans shows that
environment in several ways (discussed above), suggesting
rms with a female top manager tend to face greater
that other factors that a ect productivity dominate.
di culties in obtaining nance in Malaysia. About 47
However, this productivity gap is not signi cant, and is
percent of rms with a female top manager in Malaysia are driven largely by the retail sector. ese ndings hold even
credit constrained (partially or fully), compared with a after accounting for di erences in basic rm
much lower 36 percent of rms with a male top manager. characteristics.
While the di erence is large, it is not signi cant. In Higher productivity among rms with a female top
contrast, there is almost no di erence in the proportion of manager is observed in the individual sectors ( gure 5B).
rms with a female rather than male top manager that are e productivity di erence is large and signi cant for
credit constrained among upper middle income or lower retail rms, and this holds even after accounting for
middle-income groups. For the EAP region, the di erences in basic rm characteristics. For the
proportion is lower among rms with a female rather than manufacturing sector and the other services sectors, the
male top manager (33 percent vs. 38 percent, productivity gap is noticeable but not signi cant; even
respectively), although not signi cantly so. e qualitative quantitatively, it becomes much smaller when accounting
nature of the results in this paragraph is una ected when for di erences in basic rm characteristics.
accounting for di erences in basic rm characteristics. In the EAP region, the productivity level is roughly
the same for rms with a female or a male top manager. In
Labor productivity is higher for firms with a the upper- and lower-middle-income countries, the
female top manager, a result largely driven by productivity level is somewhat lower for rms with a
female top manager ( gure 5A). ese productivity
retail-sector firms
di erences in the comparator groups are not signi cant.
Studies comparing the productivity of female- vs. Results discussed here for the comparator groups are
male-owned or -managed rms seem to suggest that qualitatively unchanged even after accounting for
productivity is lower for rms with a female top manager di erences in basic rm characteristics.
Figure 5 Female-managed firms have higher productivity than male-managed firms in the retail sector
in Malaysia
Figure 5A Figure 5B
25 22.7
40
34.8
Annual sales per worker
35 20
Annual sales per worker
('000 USD, median)
29.7
('000 USD, median)
30 15.2 15.2
25 15 13.0
11.7 12.1
20 18.0
16.2
14.6 10
15 12.4 12.3 12.3
10 5
5
0 0
Malaysia EAP Upper-middle Lower-middle Manufacturing Retail Other services
income income
Female top manager Male top manager Female top manager Male top manager
Source: Enterprise Surveys (various years).
4
Conclusion References
Over a quarter of all rms in Malaysia have a female Amin, Mohammad and Asif Islam (2016), “Women Managers and
top manager. e tendency of having a female top e Gender-Based Gap in Access to Education: Evidence from
Firm-Level Data in Developing Countries”, Feminist Economics
manager in Malaysia is particularly high among large 22(3): 127-153.
rms, exporting rms, and rms in the retail sector. ere Amin, Mohammad and Asif Islam (2014), “Are ere More Female
is no evidence that rms with a female top manager are Managers in the Retail Sector? Evidence from Survey Data in
less productive than rms with a male top manager; in Developing Countries,” Journal of Applied Economics 17(2):
213-228.
fact, the opposite result holds and is largely driven by the
Blau, Francine D., and Lawrence M. Kahn (2003), "Understanding
retail sector. One worrisome feature is that across many the International Di erence in the Gender Pay Gap," Journal of
important dimensions of the business environment, such Labor Economics, 21(1) 106-144.
as regulatory burden, corruption, and crime and security, Elson, D. (1999), “Labor Markets as Gendered Institutions: Equality,
female top managers in Malaysia tend to work in rms E ciency and Empowerment Issues”, World Development, 27(3):
611-627.
that experience a more di cult business environment Hausmann, R., L. D. Tyson, and S. Zahidi (2006), e Global Gender
than rms with male top managers. Policy measures Gap Report 2006, World Economic Forum, Geneva, Switzerland.
aimed at improving the business environment faced by Hsieh, Chang-Tai, Erik Hurst, Charles I. Jones and Peter J. Klenow
rms with female top managers may therefore be needed (2013), “ e Allocation of Talent and U.S. Economic Growth,”
NBER Working Paper No. 18693.
to maximize the contribution of females as top managers.
Rendall, Michelle (2012), “Structural Change in Developing
Countries: Has it Decreased Gender Inequality?” World
Notes Development, 45:1-16.
Robb A., and J. Wolken (2002), “Firm, Owner and Financing
1. Enterprise Surveys are designed to be representative of the Characteristics: Di erences between Male and Female-owned
non-agricultural and non- nancial formal (registered) private Small Businesses,” Working Paper, Federal Reserve Board of
sector of the economy. Note that the survey does not cover rms Governors.
with less than ve employees or those in the informal sector. e Sabarwal, Shwetlana and Katherine Terrell (2008), “Does Gender
surveys are strati ed by rm-size (small, medium, and large), Matter for Firm Performance? Evidence from Eastern Europe and
sector, and location within the country. e surveys follow a Central Asia,” IZA Discussion Paper Series No. 3758.
common sampling methodology and a common questionnaire, World Bank (2011), Gender Equality and Development, World
allowing for cross-country comparability. More information on the Development Report 2012, World Bank, Washington DC.
surveys and the raw data can be obtained from
www.enterprisesurveys.org.
2. e EAP region comprises the six large economies in the region for
which data are available. ese are Cambodia, Indonesia, Lao
PDR, the Philippines, ailand, and Vietnam. e EAP regional
averages exclude Malaysia.
3. e upper-middle-income and lower-middle-income classi cation
follows the World Bank, excluding Malaysia and countries already
included in the EAP comparator group. ere are 45 countries in
the lower-middle-income group and 41 in the upper-middle-
income group. Due care is taken to ensure that the results discussed
for the various comparator groups are not unduly a ected by
outlier countries.
4. Gender parity in tertiary education is de ned as the ratio of gross
enrollment rate in tertiary education for women to men. Data
source is WDI, World Bank and for the years covered by the ES.
e Enterprise Note Series presents short research reports to encourage the exchange of ideas on business environment
issues. e notes present evidence on the relationship between government policies and the ability of businesses to create
wealth. e notes carry the names of the authors and should be cited accordingly. e ndings, interpretations, and
conclusions expressed in this note are entirely those of the authors. ey do not necessarily represent the views of the
International Bank for Reconstruction and Development/World Bank and its a liated organizations, or those of the
Executive Directors of the World Bank or the governments they represent.
Global Knowledge & Research Hub
in Malaysia
5