Stock Market Reaction to Female CEO Nominations: Is the Market Gendered?

41 Pages Posted: 29 May 2019

Date Written: May 03, 2019


Stock markets react negatively to the nomination of female CEOs. Recent research has argued that this may reflect the investors’ negative perception about female leadership and media reporting that is biased against women. In this paper, we propose a new explanation based on the hypothesis that the market is ‘gendered’. As female and male market participants may exhibit differences in preferences and in biases towards gender, gender diversity in the financial sector potentially impacts the market outcomes. To test this hypothesis, we run a simulation-based lab experiment in which female and male participants trade stocks of a company in response to the nomination of its future CEO, who could be either a man or a woman. We find that when a female CEO is appointed, the female participants’ perception is positive (they buy stocks), while the male participants’ perception is negative (they sell stocks). The opposite result holds when a male CEO is appointed. We interpret our findings drawing from homophily, entitativity and expectation theories. The policy implication of our study is that the gender issue is not only an issue reflected at the corporate level in the need to nominate more female CEOs but also an issue at the financial industry level related to the need to increase gender diversity by attracting more women in investment occupations; finally it is an issue at the societal level related to the need to change individual and collective stereotypes about female leadership.

Keywords: CEO Nomination, Gender Diversity, Gender Stereotypes, Entitativity, Homophily, Leadership

JEL Classification: J16, M14

Suggested Citation

Longin, François and Santacreu-Vasut, Estefania, Stock Market Reaction to Female CEO Nominations: Is the Market Gendered? (May 03, 2019). Available at SSRN: or

François Longin (Contact Author)

ESSEC Business School ( email )

Avenue Bernard Hirsch
BP 105 Cergy Cedex, 95021


Estefania Santacreu-Vasut

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY

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