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Powerful female CEOs and the capital structure of firms

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  • Huang, Xiaohong
  • Kabir, Rezaul
  • Thijssen, Maximiliaan Willem Pierre

Abstract

This study examines the impact of female CEOs and their power on corporate debt usage. Adopting the framework of Finkelstein (1992), we distinguish different power dimensions to analyze a sample of 418 CEOs of non-financial U.S. listed firms over the time period of 2007–2015. We find that the leverage of firms run by female CEOs is not different from that of firms run by male CEOs. However, when firms experience a transition of male-to-female CEOs, we find some evidence of an increase in debt. Further analysis shows that the gender effect is associated with the type of power CEOs possess. Female CEOs with structural power (reflected by low frequency of board meetings) and prestige power (reflected by education from an elite university) tend to use more debt than their powerful male peers. We recommend that the gender effect needs to be studied together with the power CEOs hold.

Suggested Citation

  • Huang, Xiaohong & Kabir, Rezaul & Thijssen, Maximiliaan Willem Pierre, 2024. "Powerful female CEOs and the capital structure of firms," Journal of Behavioral and Experimental Finance, Elsevier, vol. 41(C).
    • Handle: RePEc:eee:beexfi:v:41:y:2024:i:c:s221463502300093x
    DOI: 10.1016/j.jbef.2023.100879
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    More about this item

    Keywords

    CEO; Gender; Power; Capital Structure; Leverage;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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