Female-Led Firms: Performance and Risk Attitudes

26 Pages Posted: 21 Sep 2013

See all articles by Pierpaolo Parrotta

Pierpaolo Parrotta

Aarhus University - School of Business and Social Sciences

Nina Smith

Aarhus University - Department of Economics; IZA Institute of Labor Economics

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.

Keywords: firm performance, risk aversion, female CEO

JEL Classification: G34, J16, L25

Suggested Citation

Parrotta, Pierpaolo and Smith, Nina, Female-Led Firms: Performance and Risk Attitudes. IZA Discussion Paper No. 7613. Available at SSRN: https://ssrn.com/abstract=2329083

Pierpaolo Parrotta (Contact Author)

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Nina Smith

Aarhus University - Department of Economics ( email )

Universitetsparken
DK-8000 Aarhus C
Denmark
+45 8948 6413 (Phone)
+45 8615 5175 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
147
Abstract Views
764
rank
205,189
PlumX Metrics