The Impact of CFO Gender on Bank Loan Contracting

49 Pages Posted: 21 Apr 2011

See all articles by Qiang Wu

Qiang Wu

Rensselaer Polytechnic Institute (RPI) - Lally School of Management

Bill Francis

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology

Iftekhar Hasan

Fordham University - Gabelli School of Business; Bank of Finland

Multiple version iconThere are 2 versions of this paper

Date Written: April 19, 2011

Abstract

Motivated by recent studies showing that female CFOs are more risk-averse than male CFOs when making various corporate decisions, we examine whether banks take into consideration the gender of CFOs when pricing bank loans. We find that in our sample, firms under the control of female CFOs on average enjoy about 11% lower bank loan prices than firms under the control of male CFOs. In addition, loans given to female-CFO-led companies have longer maturities and are less likely to be required to provide collateral than loans given to male-CFO-led companies. Our results are robust to a series of robustness tests, such as a firm and year fixed-effect regression, a Heckman two-stage self-selection model, a propensity score-matching method and a differences-in-differences approach. Overall, our results suggest that banks tend to recognize the role of female CFOs in providing more reliable accounting information ex ante and reducing default risk ex post, and grant firms with female CFOs lower loan prices and more favorable contract terms.

Keywords: CFO, Gender, Bank Loans

Suggested Citation

Wu, Qiang and Francis, Bill and Hasan, Iftekhar, The Impact of CFO Gender on Bank Loan Contracting (April 19, 2011). Journal of Accounting, Auditing and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1815433

Qiang Wu (Contact Author)

Rensselaer Polytechnic Institute (RPI) - Lally School of Management ( email )

110 8th St
Troy, NY 12180
United States
518-276-3338 (Phone)
518-276-8661 (Fax)

Bill Francis

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology ( email )

110 8th St
Troy, NY 12180
United States

Iftekhar Hasan

Fordham University - Gabelli School of Business ( email )

Rose Hill Campus Bronx
New York, NY 10458
United States

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

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