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

98 Pages Posted: 7 May 2018 Last revised: 11 Feb 2020

See all articles by Ran Duchin

Ran Duchin

University of Washington - Michael G. Foster School of Business

Mikhail Simutin

University of Toronto - Rotman School of Management

Denis Sosyura

Arizona State University

Date Written: December 8, 2019

Abstract

CEOs allocate more investment capital to male than female division managers. Using data from individual Census records, we find that this gender gap is driven by CEOs who grew up in male-dominated families—those 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. Overall, the gender gap originates in CEO preferences developed during formative years and produces significant real effects.

Keywords: CEO, gender, family descent, formative years

JEL Classification: G30, G31, G40, J16, J71, H31

Suggested Citation

Duchin, Ran and Simutin, Mikhail and Sosyura, Denis, The Origins and Real Effects of the Gender Gap: Evidence from CEOs' Formative Years (December 8, 2019). Paris December 2018 Finance Meeting EUROFIDAI - AFFI; Rotman School of Management Working Paper No. 3171292. Available at SSRN: https://ssrn.com/abstract=3171292 or http://dx.doi.org/10.2139/ssrn.3171292

Ran Duchin

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Mikhail Simutin (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://www.rotman.utoronto.ca/simutin

Denis Sosyura

Arizona State University ( email )

Tempe, AZ 85287-3706
United States

HOME PAGE: http://www.public.asu.edu/~dsosyura/

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