After doing some research, I haven't found any scientific literature regarding the retention rate or effectiveness of cloze flashcards. However, there is some past research regarding what each type of flashcard is best for, so I'll present that here. Bolded items are things that each type of flashcard test.
As @user83725 states, cloze flashcards are much more suited to test your comprehension of the context of a word in a sentence than are translation flashcards. According to Investigating the construct measured by banked gap-fill items: Evidence from eye-tracking, cloze flashcards tend to test different things based on the skill level of the learner. While more experienced speakers of the language tend to apply a broad range of knowledge to find the best situational fit, less experienced speakers tend to use the words that directly surround the missing word to fill the gap instead of using outside knowledge. Because of this, cloze flashcards are good for testing a wide variety of vocabulary in the language.
In certain cases, cloze flashcards can be used to test grammar abilities. In the example,
He __ a man.
the learner's knowledge of the conjugation of “to be” is tested. Similarly, depending on the placement of the gap, cloze flashcards can test your knowledge of parts of speech. For instance,
He is __ man.
tests whether the learner knows the appropriate part of speech in the situation.
On the other hand, direct translation flashcards are best for reviewing concrete and more simple concepts, like vocabulary. Reviewing grammar through translation flashcards doesn't work well because grammar cannot be adequately acquired unless seen in context.
While cloze flashcards are best for reviewing grammar concepts and some applications of vocabulary, direct translation flashcards are better for reviewing just simple vocabulary terms. Both types of flashcards have their own merits, and seeing as how there is no scientific consensus as to which is better, the best approach is to simply use both to complement each other. Use translation flashcards to review vocabulary, and use cloze flashcards for grammar and to apply the vocabulary you've learned.