Age, Gender, and Risk-Taking: Evidence from the S&P 1500 Executives and Market-Based Measures of Firm Risk

Journal of Business Finance & Accounting, Vol. 48, No. 9-10, pp. 1988-2014, 2021

52 Pages Posted: 10 Jan 2015 Last revised: 6 Sep 2022

See all articles by Jarkko Peltomäki

Jarkko Peltomäki

Stockholm University - Stockholm Business School

Jukka Sihvonen

Aalto University

Steve Swidler

Lafayette College - Department of Economics & Business

Sami Vähämaa

University of Vaasa

Date Written: June 30, 2020

Abstract

This paper contributes to the literature by examining whether the age and gender of the firm’s top executives influence market-based measures of firm risk. Using data on the S&P 1500 firms, we document that CEO and CFO age and gender have a direct effect on market-based firm risk measures in addition to the indirect influence they may have through corporate policy choices. Specifically, we find that firms led by older CEOs and CFOs have less volatile stock returns and lower idiosyncratic risk. Although the relationship between executive gender and firm risk is more equivocal, our results suggest that female-led firms are associated with lower levels of total and idiosyncratic risk after controlling for firm-specific attributes, policy choices, and managerial risk-taking incentives. We also document that CEO and CFO age and gender do not influence the level of systematic risk. Overall, our empirical findings demonstrate that the age and gender of the firm’s top executives may have important implications for firm riskiness.

Keywords: Executives, CEOs, CFOs, age, gender, firm risk, risk-taking

JEL Classification: G01, G21, G30, G32

Suggested Citation

Peltomäki, Jarkko and Sihvonen, Jukka and Swidler, Steven and Vähämaa, Sami, Age, Gender, and Risk-Taking: Evidence from the S&P 1500 Executives and Market-Based Measures of Firm Risk (June 30, 2020). Journal of Business Finance & Accounting, Vol. 48, No. 9-10, pp. 1988-2014, 2021, Available at SSRN: https://ssrn.com/abstract=2547516 or http://dx.doi.org/10.2139/ssrn.2547516

Jarkko Peltomäki

Stockholm University - Stockholm Business School ( email )

Stockholm
Sweden

Jukka Sihvonen

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

Steven Swidler

Lafayette College - Department of Economics & Business ( email )

Easton, PA 18042
United States
610-330-5303 (Phone)

Sami Vähämaa (Contact Author)

University of Vaasa ( email )

P.O. Box 700
Vaasa, FI-65101
Finland
+358 29 449 8455 (Phone)

HOME PAGE: http://www.uwasa.fi/~sami

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