Investor Preference for Director Characteristics: Portfolio Choice with Gender Bias
The Accounting Review (Forthcoming)
53 Pages Posted: 27 Jun 2013 Last revised: 30 Sep 2019
Date Written: August 29, 2019
This study examines whether investor-level preferences for director characteristics influence portfolio choices, using data on the U.S. holdings of non-U.S. funds. Consistent with bias-based preferences influencing portfolio allocations, funds from countries with greater gender inequality invest less and hold smaller stakes in firms with more female directors. Since variation in funds’ home-country gender biases are plausibly unrelated to the selection and performance of female directors in U.S. firms, the empirical strategy mitigates endogeneity concerns arising from estimates based on associations between market performance and gender demographics. The study contributes by linking investments to measured gender biases, and by providing evidence, through additional analysis, of potential channels through which gender bias may affect portfolio choice.
Keywords: Investor taste; Director characteristics; Gender bias; Portfolio Choice; Foreign funds
JEL Classification: G11, J16, M10
Suggested Citation: Suggested Citation