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Individual investors’ trading behavior and gender difference in tolerance of sex crimes: Evidence from a natural experiment

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  • Gao, Huasheng
  • Liu, Zhengkai
  • Yang, Chloe Chunliu

Abstract

We present evidence that males are more tolerant of sex crimes than females. We exploit a natural experiment, in which a firm’s executive rapes a nine-year-old girl. Based on individual-level stock transaction data (over 0.2 million individual investors), we show that, after this crime, females are less likely to purchase this firm’s stock than males. This result is stronger for females who are likely more averse to sex crimes. We also find that females’ intolerance of sex crimes reduces their trading profits, and that the gender difference toward sex crimes is significantly larger than the gender difference toward non-sexually-related scandals.

Suggested Citation

  • Gao, Huasheng & Liu, Zhengkai & Yang, Chloe Chunliu, 2023. "Individual investors’ trading behavior and gender difference in tolerance of sex crimes: Evidence from a natural experiment," Journal of Empirical Finance, Elsevier, vol. 73(C), pages 349-368.
    • Handle: RePEc:eee:empfin:v:73:y:2023:i:c:p:349-368
    DOI: 10.1016/j.jempfin.2023.08.001
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    More about this item

    Keywords

    Household finance; Stock trading; Individual investors; Tolerance of sex crimes; Gender difference;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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