The Origins and Real Effects of the Gender Gap: Evidence from CEOs' Formative Years

Using individual census records, we provide novel evidence on CEOs’ socioeconomic backgrounds and study their role in investment decisions. Male CEOs allocate more investment capital to male than female division managers. This gender gap is driven by CEOs who grew up in male-dominated families where the father was the only income earner and had more education than the mother. The gender gap also increases for CEOs who attended all-male high schools and grew up in neighborhoods with greater gender inequality. The effect of gender on capital budgeting introduces frictions and erodes investment efficiency.

Keywords: CEO, gender, family descent, formative years

JEL Classification: D91, G30, G31, G40, J16, J71

Suggested Citation: Suggested Citation

Duchin, Ran and Simutin, Mikhail and Sosyura, Denis, The Origins and Real Effects of the Gender Gap: Evidence from CEOs' Formative Years (July 17, 2020). Review of Financial Studies, Available at SSRN: https://ssrn.com/abstract=3171292 or http://dx.doi.org/10.2139/ssrn.3171292