Female-led firms: Performance and risk attitudes

TitleFemale-led firms: Performance and risk attitudes
Publication TypeJournal Article
Year of Publication2013
AuthorsParrotta, P, Smith, N
JournalIZA Discussion Paper
Volume2013
Issue7613
Date Published09/2013
PublisherForschungsinstitut zur Zukunft der Arbeit (IZA)
Place PublishedBonn, Germany
Keywordsfemale CEO, firm performance, risk aversion
Abstract

This paper investigates the relationship between gender of the CEO and composition of the board of directors (female chairman and share of women in the boardroom) and firm’s risk attitudes measured as variability in four firm outcome variables (investments, profits, return to equity, and sales). Using a merged employer-employee panel sample of Danish companies with more than 50 employees, we find extensive evidence of a negative association between female CEO and firm’s risk attitudes. This finding might be consistent with the theoretical assumption according to which women typically present a substantially higher risk aversion profile and put more effort in monitoring firm activities than men in the financial matter domains. A number of robustness checks corroborate and better explain our main findings.

URLhttp://ftp.iza.org/dp7613.pdf
Refereed DesignationNon-Refereed