The Impact of Top Executive Gender on Asset Prices: Evidence from Stock Price Crash Risk

54 Pages Posted: 17 Jan 2018 Last revised: 5 Aug 2018

Yiwei Li

University of Reading, ICMA Centre

Yeqin Zeng

Durham University Business School; University of Reading - ICMA Centre

Date Written: January 16, 2018

Abstract

We examine the implication of executive gender on asset prices. Using a large sample of US public firms during 2006-2015, we find a negative association between female CFOs and future stock price crash risk. However, the impact of female CEOs on crash risk is not statistically significant. The results support the notion that CFOs play a stronger role than CEOs in curbing bad news hoarding activities because CFOs' primary duties are financial reporting and planning. Our findings are robust to several econometric specifications controlling for potential endogeneity and to alternative measures of crash risk. At last, we show that the negative relation between female CFOs and future stock price crash risk is more pronounced among firms with weaker corporate governance, less market competition, lower analyst coverage, and higher financial leverage. Collectively, our evidence highlights the importance of CFO gender for firm financial decision making and stock return tail risk.

Keywords: Gender; Crash risk; CFO; CEO; Bad news hoarding

JEL Classification: G12; G32; G34; J16

Suggested Citation

Li, Yiwei and Zeng, Yeqin, The Impact of Top Executive Gender on Asset Prices: Evidence from Stock Price Crash Risk (January 16, 2018). Available at SSRN: https://ssrn.com/abstract=3102873 or http://dx.doi.org/10.2139/ssrn.3102873

Yiwei Li

University of Reading, ICMA Centre ( email )

Whiteknights
Henley, RG9 3AU
United Kingdom

Yeqin Zeng (Contact Author)

Durham University Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA, Berkshire RG66BA
United Kingdom

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