Gender and Corporate Finance: Are Male Executives Overconfident Relative to Female Executives?

49 Pages Posted: 7 Sep 2008 Last revised: 24 Feb 2017

Jiekun Huang

University of Illinois at Urbana-Champaign - Department of Finance

Darren J. Kisgen

Boston College - Carroll School of Management

Date Written: June 21, 2012

Abstract

We examine corporate financial and investment decisions made by female executives compared to male executives. Male executives undertake more acquisitions and issue debt more often than female executives. Further, acquisitions made by firms with male executives have announcement returns approximately 2% lower than those made by female executive firms, and debt issues also have lower announcement returns for firms with male executives. Female executives place wider bounds on earnings estimates and are more likely to exercise stock options early. This evidence suggests men exhibit relative overconfidence in significant corporate decision-making compared to women.

Keywords: Corporate policies, Gender, Overconfidence, Mergers and Acquisitions

JEL Classification: G32, G34, J16

Suggested Citation

Huang, Jiekun and Kisgen, Darren J., Gender and Corporate Finance: Are Male Executives Overconfident Relative to Female Executives? (June 21, 2012). Journal of Financial Economics (2012) 108, 822-839.. Available at SSRN: https://ssrn.com/abstract=1263990 or http://dx.doi.org/10.2139/ssrn.1263990

Jiekun Huang

University of Illinois at Urbana-Champaign - Department of Finance ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

HOME PAGE: http://www.huangjk.info

Darren J. Kisgen (Contact Author)

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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