The Relationship Between CEO Gender and Stock Returns: An Investigation of Changes Over Time and Industry Heterogeneity

Abstract

This paper examines the relationship between CEO gender and company stock performance, specifically studying temporal changes and industry heterogeneity in this relationship. While existing economic literature has generally studied the differential impact of female-headed firms on stock returns, there is a dearth of scholarship on how this relationship changes with time and with specific industry characteristics, particularly the degree of female representation in the industry of the firm, denoted by the industry proportions of female CEOs and female employees. Examining data on CEO gender and monthly stock returns for S&P 1500 firms from 1992 to 2014, this paper finds that while female-headed firms are associated with lower returns than their male counterparts from 1992 to 2007, this negative relationship has been decreasing in magnitude over time and is no longer significant from 2008 onwards. While there is evidence for a declining gender gap in monthly stock returns over time, evidence for heterogeneity in the gender effect on returns across industries remains weak. As such, this paper does not find any statistically significant evidence for a differential gender impact with larger proportions of female CEOs or female employees in the industry.