CEO gender, corporate risk-taking, and the efficiency of capital allocation

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We extend the literature on how managerial traits relate to corporate choices by documenting that firms run by female CEOs have lower leverage, less volatile earnings, and a higher chance of survival than otherwise similar firms run by male CEOs. Additionally, transitions from male to female CEOs (or vice-versa) are associated with economically and statistically significant reductions (increases) in corporate risk-taking. The results are robust to controlling for the endogenous matching between firms and CEOs using a variety of econometric techniques. We further document that this risk-avoidance behavior appears to lead to distortions in the capital allocation process. These results potentially have important macroeconomic implications for long-term economic growth.
Original languageEnglish
Pages (from-to)193–209
JournalJournal of Corporate Finance
Early online date10 Mar 2016
Publication statusPublished - Aug 2016


  • Risk-Taking; CEO gender; Capital allocation


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