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Gender and corporate finance: Are male executives overconfident relative to female executives?

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  • Huang, Jiekun
  • Kisgen, Darren J.

Abstract

We examine corporate financial and investment decisions made by female executives compared with male executives. Male executives undertake more acquisitions and issue debt more often than female executives. Further, acquisitions made by firms with male executives have announcement returns approximately 2% lower than those made by female executive firms, and debt issues also have lower announcement returns for firms with male executives. Female executives place wider bounds on earnings estimates and are more likely to exercise stock options early. This evidence suggests men exhibit relative overconfidence in significant corporate decision making compared with women.

Suggested Citation

  • Huang, Jiekun & Kisgen, Darren J., 2013. "Gender and corporate finance: Are male executives overconfident relative to female executives?," Journal of Financial Economics, Elsevier, vol. 108(3), pages 822-839.
    • Handle: RePEc:eee:jfinec:v:108:y:2013:i:3:p:822-839
    DOI: 10.1016/j.jfineco.2012.12.005
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    More about this item

    Keywords

    Corporate policies; Gender; Overconfidence; Mergers and acquisitions;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • 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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