Gender Matters: Market Perception of Future Performance

This research project revisits the question of gender bias in financial markets. Using theories from sociology, social psychology, and finance, we develop an interdisciplinary framework to explain how investor perception of future firm performance may be skewed by gender stereotypes, leading to a gender bias in market reaction to CEO announcements.  

In this project, we develop and test a rigorous framework of gender bias in financial markets, where the relative proportion of female CEOs and the amount of information about them affect investor perception: due only to their relative paucity, female CEOs remain tokens, which leads to disproportionate visibility and the double-bind of gender stereotypes. As investors rely on precious information to evaluate future firm performance, they are likely to employ mental heuristics for the assessment of female CEOs, especially when announcements contain little background information.

Based on this framework, we empirically investigate whether the market reacts differently to male and female CEO announcements over time and by firm size.

Researcher: Kylie Braegelmann

Selected Publications:

• Braegelmann, K / Ujah, N. (2020). “Gender Matters: Market Perception of Future Performance”, Managerial Finance,  Vol. 46 No. 10, pp. 1247-1262. available here