Diagnosing Discrimination: Stock Returns and CEO Gender

By Justin Wolfers. Social Science Research Network, 2006

248 citations recorded by the source corpus.

A vast labor literature has found evidence of a %u201Cglass ceiling%u201D, whereby women are under-represented among senior management. A key question remains the extent to which this reflects unobserved differences in productivity, preferences, prejudice, or systematically biased beliefs about the ability of female managers. Disentangling these theories would require data on productivity, on the preferences of those who interact with managers, and on perceptions of productivity. Financial markets provide continuous measures of the market%u2019s perception of the value of firms, taking account of the beliefs of market participants about the ability of men and women in senior management. As such, financial data hold the promise of potentially providing insight into the presence of mistake-based discrimination. Specifically if female-headed firms were systematically under-estimated, this would suggest that female-headed firms would outperform expectations, yielding excess returns. Examining data on S&P 1500 firms over the period 1992-2004 I find no systematic differences in returns to holding stock in female-headed firms, although this result reflects the weak statistical power of our test, rather than a strong inference that financial markets either do or do not under-estimate female CEOs.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/a0c35e5c624d50aa60c4a7b0ce6e8ff89747feb5

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Citations in the corpus

Female executives and earnings management (2010, background): “Wolfers (2006) examines the stock market performance of large female-headed US firms.”
Inaccurate Statistical Discrimination: An Identification Problem (2019, unknown): “Wolfers (2010): “Racial Discrimination Among NBA Referees,” The Quarterly Journal of Economics, 125, 1859–1887.”
Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors (2010, unknown): “The number of female CEOs among Execucomp firms increased from just four in 1992 to 34 in 2004, according to Wolfers (2006), but women still represent only 1.3 percent of the CEO-year observations in his sample.”
Women and Leadership (2017, unknown): “James, 2007; Martin, Nishikawa, & Williams, 2009; Wolfers, 2006), corporate social responsibility (CSR; e.g., Bear, Rahman, & Post, 2010; Boulouta, 2013; Post, Rahman, & Rubow, 2011), group processes (e.g., Abbott, Parker, & Presley, 2012; Adams & Ferreira, 2009; del Carmen Triana, Miller, &…”
Gender Differences and Dynamics in Competition: The Role of Luck (2012, unknown): “Figure 3 shows round by round mean efforts by gender: men complete more sliders on average in every round.6 Significance tests provide support for this gender performance gap: Table 1 reports that the proportion of women’s efforts at or below the median is significantly greater than for men at the…”
The Emergence of Male Leadership in Competitive Environments (2012, background): “Malmendier and Tate (2005, 2008) show that CEOs – a group where women are underrepresented (Bertrand and Hallock, 2001; Wolfers, 2006) – not only possess high degrees of overconfidence but also that this distorts their investment decisions.”
Competitive Pressure Widens the Gender Gap in Performance: Evidence from a Two-stage Competition in Mathematics (2019, background): “Also, men hold a larger portion of the highestranked occupations even within firms, in what is frequently referred to as "the glass ceiling effect" (Bertrand, 2009; Blau, Farber, and Winkler, 2010; Bertrand and Hallock, 2001; Wolfers, 2006).”
Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance (2019, unknown): “See for example, Bertrand and Hallock (2001), Wolfers (2006), Gayle et al. (2012), Dezsö and Ross (2012).”
Sex matters: Gender differences in a professional setting (2007, methodology): “…we contribute to the literature on gender differences (see, e.g., Feingold (1994), Byrnes, Miller, and Schafer (1999), Bertrand and Hallock (2001), Barber and Odean (2001), and Wolfers (2006)) by showing that behavioral differences exist in a professional setting of female and male fund managers.”
Women in Top Management and Agency Costs (2011, background): “…mixed effects of gender diversity in top management on performance as reported in the past studies: positive effects (Welbourne, 1999; Krishnan and Park, 2005; Smith et al., 2005), negative effects (Lee and James, 2003), and no effects (Moncrief et al., 2000; Mohan and Chen, 2004; Wolfers, 2006).”