Insider's advantage: When foreign firms do not capture opportunity in the local labour market

Previous studies have argued that, relative to local firms, multinational firms may have an “outsider's advantage” in hiring women. Using a large data set of executives in the countries of the Gulf Cooperation Council, in a region with some of the lowest rates of female labour force participation in the world, I present new evidence of a setting in which foreign firms do not capture opportunity in the local labour market. I find that foreign firms, on average, are not more likely than local firms to hire female executives and are less likely to place women into top management roles. I propose that foreign firms may have fewer social networks and resources, or lack “insider's advantage”, relative to local firms for recruiting women into executive positions.

Duke Scholars

Author Alessandra Lucia Gonzalez Economics