Are Women More Likely to Seek Advice than Men? Evidence from the Boardroom

Journal of Risk and Financial Management, Vol. 8, pp. 127-149, 2015, DOI: 10.3390/jrfm8010127

23 Pages Posted: 13 Feb 2015 Last revised: 14 Feb 2015

See all articles by Maurice D. Levi

Maurice D. Levi

University of British Columbia (UBC) - Sauder School of Business

Kai Li

University of British Columbia (UBC) - Sauder School of Business; Asian Bureau of Finance and Economic Research (ABFER); China Academy of Financial Research (CAFR); European Corporate Governance Institute (ECGI); Canadian Sustainable Finance Network (CSFN)

Feng Zhang

Southern Methodist University (SMU) - Finance Department

Date Written: February 10, 2015

Abstract

It is commonly believed that women are more likely to seek advice than men; for example, on aspects of health or asking for directions when lost. This paper investigates whether women’s relatively greater propensity for advice seeking extends to important business decisions, specifically those involving corporate takeovers. Consistent with the evidence from other contexts, we show that the presence of female directors on target boards is positively and significantly associated with target boards seeking advice from top-ranked financial advisors. In contrast, we do not observe any significant association between the presence of female directors on bidder boards and their engagement of top-ranked financial advisors. We argue that the presence of a gender effect for target boards but not for bidder boards is consistent with less overconfident female versus male directors on bidder boards initiating fewer bids, higher litigation risk facing target boards for accepting too little, and the different type of advice sought by bidders and target firms.

Keywords: seeking advice; financial advisors; director gender; overconfidence; takeovers

JEL Classification: G34

Suggested Citation

Levi, Maurice David and Li, Kai and Zhang, Feng, Are Women More Likely to Seek Advice than Men? Evidence from the Boardroom (February 10, 2015). Journal of Risk and Financial Management, Vol. 8, pp. 127-149, 2015, DOI: 10.3390/jrfm8010127, Available at SSRN: https://ssrn.com/abstract=2563179

Maurice David Levi

University of British Columbia (UBC) - Sauder School of Business ( email )

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Kai Li (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

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China Academy of Financial Research (CAFR)

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Canadian Sustainable Finance Network (CSFN) ( email )

Queens University
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Canada

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Feng Zhang

Southern Methodist University (SMU) - Finance Department ( email )

SMU Cox School of Business
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Dallas, TX 75275
United States

HOME PAGE: http://https://sites.google.com/view/fengzhangfin

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