The impact of top executive gender on asset prices: Evidence from stock price crash risk

Li, Yiwei; Zeng, Yeqin

doi:10.1016/j.jcorpfin.2019.07.005

Cited by 156 publications

(88 citation statements)

References 101 publications

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“…Lastly, several studies without counterproof within the US context, report that gender diversity is negatively associated with subprime lending (Muller-Kahle and Lewellyn, 2011) and financial leverage (Huang and Kisgen, 2013). In addition, Li and Zeng (2019) find an insignificant relationship between female CEO and stock price crash risk, but a positive one for female CFO. Owen and Temesvary (2018) document a "U"-shaped association between board diversity and firms' Sharpe ratio.…”

Section: Are the Findings Consistent Across Geographical Regions And Firm Characteristics?mentioning

confidence: 97%

“…In a different perspective, Li and Zeng (2019) studied the impact of executive women (CEO and CFO) on the stock price crash risk and documented that only female CFO have a significant impact on this risk type, by decreasing it. Owen and Temesvary (2018) report a "U"-shaped relationship between gender diversity and Sharpe ratio.…”

Section: Are the Findings Consistent Across Different Gender And Corporate Risk-taking Measures?mentioning

confidence: 99%

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Gender diversity and corporate risk-taking: a literature review

Teodósio

Vieira

Madaleno

2021

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PurposeThe investigation of the relationship between gender diversity and corporate risk-taking is a recent stream of research. In this study, the authors propose an answer to the following main question: What do the authors know about gender effects in corporate risk-taking and how should we proceed?Design/methodology/approachIn order to ensure the quality and the objectiveness of the literature review, the authors selected articles published in journals that are simultaneously ranked by the Chartered Association of Business Schools (ABS, 2018) and by the Journal Citation Reports (JCR, 2018), focused on the Board of Directors (BoD) and Top Management Teams (TMT).FindingsThe literature review reveals that women's presence on the BoD and TMT impacts corporate risk-taking in different ways. Based on the analysis, it is possible to organize the extant findings in two major categories, according to gender measures, firm type and country of origin: (1) universal effects – women decrease firms' litigation risk, failure risk and operational risk while they have no significant effect on insolvency risk and; (2) contingent effects – women have contingent effects on financial risk, manipulation risk, total risk, idiosyncratic risk and systematic risk.Originality/valueCovering several different research fields, this study provides a comprehensive review concerning what the authors know regarding the effects of the BoD and TMT gender diversity in corporate risk-taking. The authors present a model summarizing empirical findings and propose a number of avenues for future research.

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Section: Are the Findings Consistent Across Geographical Regions And Firm Characteristics?mentioning

confidence: 97%

Section: Are the Findings Consistent Across Different Gender And Corporate Risk-taking Measures?mentioning

confidence: 99%

Gender diversity and corporate risk-taking: a literature review

Teodósio

Vieira

Madaleno

2021

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“…In their CFO survey,Bishop et al (2017) find that "compliance" and "obedience" pressures from the CEO significantly affect CFOs' financial reporting decisions. In a similar spirit,Li and Zeng (2019) show that CFOs become involved in bad news hoarding activities because of pressure from powerful CEOs.…”

mentioning

confidence: 94%

“…In their CFO survey,Dichev et al (2013) report that more than 90% of CFOs in their sample acknowledge that internal pressures to hit earnings benchmarks are important motivating factors for earnings management.2 A recent article in the Financial Times entitled, "How to spot companies at risk of earnings manipulation" states that "there are rewards for manipulation -stronger earnings will be greeted by higher share prices. That means cheaper equity finance for the company, and more pay for any executives whose remuneration is linked to share performance" (published on September 7, 2017).3 More evidence on the internal pressure placed by the CEO on the CFO is documented byLeone and Liu (2010),Bishop et al (2017) andLi and Zeng (2019). More specifically,Leone and Liu (2010) show that CFOs are more likely to be fired (as the designated "scapegoat") after accounting irregularities occur in firms where CEOs are more powerful.…”

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confidence: 99%

Can CFOs Resist Undue Pressure from CEOs toManage Earnings?

Sainani¹

2020

Preprint

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Building upon the premise that, under certain conditions, the ability of the Chief Executive Officer (CEO) to pressure the Chief Financial Officer (CFO) is limited, we develop a measure of CFO resistance that captures the ability of the CFO to resist undue pressure from the CEO to manage earnings. In doing so, we consider various sources of power for both the CEO and CFO, and a market setting where CFO resistance is perceived to be high. We find that firms with resistant CFOs are less likely to engage in earnings management than firms with non-resistant CFOs, ceteris paribus. Additionally, while confirming prior evidence that CEOs with strong incentives are more likely to manage earnings, we show that this effect is significantly less pronounced in the presence of resistant CFOs. Overall, our findings suggest that firms can improve the quality of financial reporting by creating conditions that enable CFO resistance.

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“…To address this concern, we employ additional methodological approaches. First, we use a propensity score matching method to pair-match firms with and without female directors based on year, industry, and a set of other firm characteristics (Li & Zeng, 2019;Liu, 2018). We then re-estimate the main regression model with propensity score matched sample to mitigate the concerns on heterogeneities between firms with and without female directors.…”

mentioning

confidence: 99%

Board gender diversity and corporate labor investment efficiency

Sun

Zhang

2021

Rev Financ Econ

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We investigate whether board gender diversity affects firms' labor investment efficiency. We find that more gender‐diverse boards (higher representation of female directors) lead to less deviations in net hiring from the optimal level of labor investment predicted by economic fundamentals (i.e., more efficient investment in labor). The impact of board gender diversity on labor investment efficiency is robust to using alternative measures of board gender diversity and labor investment efficiency, controlling for unobservable variables, and addressing potential endogeneity concerns using propensity score matching and difference‐in‐differences approach. Additional subsample analyses suggest that the relation between female directors and labor investment efficiency is stronger in firms with weak monitoring, male CEO, and low managerial ability. Our findings provide support for the role and effectiveness of female directors in disciplining managerial opportunism and strengthening corporate governance.

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The impact of top executive gender on asset prices: Evidence from stock price crash risk

Cited by 156 publications

References 101 publications

Gender diversity and corporate risk-taking: a literature review

Gender diversity and corporate risk-taking: a literature review

Can CFOs Resist Undue Pressure from CEOs toManage Earnings?

Board gender diversity and corporate labor investment efficiency

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