The Origins and Real Effects of the Gender Gap: Evidence from CEOs' Formative Years
Review of Financial Studies
99 Pages Posted: 7 May 2018 Last revised: 20 Jul 2020
Date Written: July 17, 2020
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