Gender differences in the propensity to innovate: evidence from matrilineal and patriarchal societies from an institutional perspective

This study explores whether female firm ownership or management influences the propensity to innovate. This core subject intersects with other crucial institutional aspects, such as corruption, crime, social structure and credit rationing. The empirical analysis is based on a set of manufacturing and service firms from the 2014 World Bank Surveys in Malawi. We approach innovation by considering an aggregate measure resulting from a principal component analysis, creating an aggregate continuous variable that gives the dimension of innovation breadth. The findings support a positive effect of matrilineal districts on innovation for male and female managers. Female owners are more innovative in nonmatrilineal regions/districts, and male owners are more innovative in matrilineal regions/districts. In general, the participation of employees with new ideas and training activities is positively correlated with innovation. After controlling for endogeneity, using instrumental variable estimates, corruption is not an incentive for innovation, but neither do we find a negative effect.