The Impact of Product Markets and Gender on Investment Behavior

Abstract

Gender has been shown to influence investment behavior and performance. We focus on firms who predominantly cater to one gender based on textual analysis of gender keywords in firms’ 10-Ks. We find that female (male) households significantly overweight female-focused (male-focused) firms. While we find some evidence that females outperform males in their investment performance, we find they significantly underperform in female-focused firms. Females trade significantly less than males overall, but they trade similarly to males in female-focused firms. We find weak evidence that institutional investors’ gender holdings exhibit patterns similar to individual investors. Overall, our evidence suggests that product market exposure influences investment behavior and gender is an important characteristic of such exposure.

Keywords: investor behavior; gender; product markets; overconfidence

JEL Classification: G11, G24, D83