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CEO–CFO gender congruence and stock price crash risk in energy companies

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  • Gong, Xu
  • Lin, Anlan
  • Chen, Xiaoqi

Abstract

We propose and test a novel determinant of crash risk: gender congruence with the chief executive officer (CEO) or chief finance officer (CFO). To ensure the homogeneity of the analyzed companies, our study chooses a sample of 116 energy companies from 2007–2017, we find that the CEO–CFO gender congruence improve the quality of corporate information processing and corporate governance, which in turn inhibits corporate executives from hoarding bad news and ultimately reduces crash risk in energy companies. Further, we observe a significant negative impact of CEO–CFO gender congruence on crash risk in both traditional and new energy companies; while this effect is significant only in state-owned energy companies. Additionally, we explore two potential mechanisms for the impact of CEO–CFO gender congruence on the reduction of crash risk in energy companies. The results reveal that the effect of CEO–CFO gender congruence on reducing energy companies’ crash risk is stronger in companies with low information asymmetry and at weak level of external monitoring. Overall, this paper proposes an ”information processing” mechanism for same-sex CEO–CFOs and demonstrates the effect of CEO–CFO​ gender congruence on crash risk in energy companies. Our results highlight the importance of CEO–CFO association indicators on corporate decision-making and crash risk.

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  • Gong, Xu & Lin, Anlan & Chen, Xiaoqi, 2022. "CEO–CFO gender congruence and stock price crash risk in energy companies," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 591-609.
    • Handle: RePEc:eee:ecanpo:v:75:y:2022:i:c:p:591-609
    DOI: 10.1016/j.eap.2022.06.010
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