Do Activist Hedge Funds Target Female CEOs? The Role of CEO Gender in Hedge Fund Activism
68 Pages Posted: 5 Aug 2017
Date Written: August 4, 2017
Inspired by recent academic advancement as well as real-world cases and media fervor on hedge fund activism, we investigate whether, how and why activist hedge funds are more likely to target companies led by female CEOs. Using a comprehensive dataset, we first confirm that activist hedge funds indeed regard female CEOs as preferred targets. We then report findings suggesting that the plausible cause for such a gender-specific focus is differences in managerial style between male and female CEOs: instead of being self-defensive, female CEOs are more likely to communicate and cooperate with activist hedge fund managers. Further analysis reveals that, although female-led targets experience a greater increase in operational efficiency, female CEOs themselves are still more likely to be replaced, suggesting a puzzling bias.
Keywords: Hedge Fund Activism; Female CEO; Managerial Characteristics
JEL Classification: G34; J16
Suggested Citation: Suggested Citation