Executives Gender, Institutional Environment And Pledge Clause In Bank Loan Contracts

Since the securities market is immature in our country, bank loan is still the main external funding of most enterprises. So it has a great influence on our national economy development whether the banks can achieve efficient allocation of credit resources. As a result, the influence factors of bank loan contract caused widespread attention of academia in recent years. However, previous research is mostly focused on some factors at the enterprise level such as scale, the character of property right, profitability and the robustness of financial policy, neglecting the manager’s personal characteristics. As the amount of female executives increase rapidly in recent years, they play more and more important role in modern enterprise management. From this prospective, the paper will connect gender which is an important executives’ personal characteristic with the bank loan contracts, focusing on whether executives gender differences impact on pledge clause of bank loan contract.From the perspective of gender discrimination, the paper interprets the pledge requirement of bank loans by collecting the pledge data. Furthermore, the paper reveals the mechanism of how property rights, financial liberalization and monetary policy impact on gender discrimination. So that we can provide theoretical reference and empirical evidence for the phenomena of gender discrimination in the social and economic transition period in C hinese credit market. In empirical analysis, we use China’s a-share listed companies from 2007 to 2012 as samples. Through the related analysis, univariate analysis and multivariate linear regression method, the results show that: controlling for other factors, CFO gender has a significant effect on loan contracts. The pledge clause are tighter for female CFO, namely compared with listed companies with male CFO, companies with female CFO hold bank loans in a significantly higher proportion of the loan pledge. And on specific pledge form, female CFOs are more likely to be required to provide mortgage pledge for which the constraint is tighter. Further, the study shows that private enterprises with female CFO suffer credit discrimination noticeably while state-owned enterprises do not. In addition, the financial marketization reform help alleviate gender discrimination in the credit markets. And the loose monetary policy has positive effects on alleviating the gender discrimination. We also find that banks tighten pledge requirements to companies with higher proportion of female directors.Gender discrimination in the credit markets causes an adverse impact on the allocation of credit resources. It’s not conducive to the healthy development of financial market in C hina. The theoretical analysis and empirical test lead us to believe that: to reduce or even eliminate gender discrimination phenomenon in the credit markets, first, companies should encourage female managers to improve their social participation and improve the quality of information disclosure to gain recognition from the market; second, banks should pay more attention to the enterprise’s financia l performance and solvency etc., but not be driven by noneconomic factors; third, the government should accelerate financial market reform to build open and transparent financial market conditions.