CEO Gender Effects On Valuation And Risk

In the corporate finance field the most important section is the companies’ valuation andrisk,we all try to explain the change on risk and value through the company’s governancestructure and the major events. However, the previous research is seldom introduced thegender factor. But now with the increase of the absolute quantity and influence in femaleCEO，we begin to study at the gender of CEO.The gender on CEO’s impact has not been determined yet; our study is force on usingevents study to examine whether gender-difference will affect the value and risk. Firstly weselect343of female CEO appointments over2000-2012and a matched sample of343maleCEO appointments. Then we take a simple descriptive statistics on characteristic of thecompany and the board via two groups. We estimate the volatility of value and riskbefore/after the CEO’s appointment. In the end，we use Logit Model to estimate if thehigh-risk company prefer to seek for female CEO.The main result is as follows：there is no influence between CEO gender and company’svalue，only the volatility on female value is larger；at the same time we conclude that changesin risk following CEO appointments are significantly lower for female CEO compared to thematched-male. Furthermore, we find evidence consistent with our hypothesis that firms withrelatively high risk are more likely to appoint female CEO.We believe that due to the influence of CEO gender on the value of company is notsignificant, so investors could be more concerned about the fundamentals of analysis, ratherthan the gender factor; in addition, the investors of different risk preferences can refer to CEOgender to determine the level of the company’s risks, particularly the companies and investorsof risk aversion can choose female CEO, it is easier to achieve the purpose of risk aversion.