Diagnosing Discrimination: Stock Returns and CEO Gender
AbstractA vast labor literature has found evidence of a "glass ceiling", whereby women are under-represented among senior management. A key question remains the extent to which this reflects unobserved differences in productivity, preferences, prejudice, or systematically biased beliefs about the ability of female managers. Disentangling these theories would require data on productivity, on the preferences of those who interact with managers, and on perceptions of productivity. Financial markets provide continuous measures of the market's perception of the value of firms, taking account of the beliefs of market participants about the ability of the men and women in senior management. As such, financial data hold the promise of potentially providing insight into the presence of mistake-based discrimination. Specifically if female-headed firms were systematically under-estimated, this would suggest that female-headed firms would outperform expectations, yielding excess returns. Examining data on S&P 1500 firms over the period 1992-2004 I find no systematic differences in returns to holding stock in female-headed firms, although this result reflects the weak statistical power of our test, rather than a strong inference that financial markets either do or do not under-estimate female CEOs.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1944.
Length: 19 pages
Date of creation: Jan 2006
Date of revision:
Publication status: published in: Journal of the European Economic Association, 2006, 4 (2-3), 531-541
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Other versions of this item:
- Justin Wolfers, 2006. "Diagnosing Discrimination: Stock Returns and CEO Gender," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 531-541, 04-05.
- Justin Wolfers, 2006. "Diagnosing Discrimination: Stock Returns and CEO Gender," NBER Working Papers 11989, National Bureau of Economic Research, Inc.
- Wolfers, Justin, 2006. "Diagnosing Discrimination: Stock Returns and CEO Gender," CEPR Discussion Papers 5507, C.E.P.R. Discussion Papers.
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G3 - Financial Economics - - Corporate Finance and Governance
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- J7 - Labor and Demographic Economics - - Labor Discrimination
- K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-05 (All new papers)
- NEP-BEC-2006-02-05 (Business Economics)
- NEP-FIN-2006-02-05 (Finance)
- NEP-FMK-2006-02-05 (Financial Markets)
- NEP-LAW-2006-02-05 (Law & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Corporate Governance And Equity Prices,"
The Quarterly Journal of Economics,
MIT Press, vol. 118(1), pages 107-155, February.
- Paul A. Gompers & Joy L. Ishii & Andrew Metrick, 2001. "Corporate Governance and Equity Prices," NBER Working Papers 8449, National Bureau of Economic Research, Inc.
- Paul A. Gompers & Joy L. Ishii & Andrew Metrick, 2002. "Corporate Governance and Equity Prices," Center for Financial Institutions Working Papers 02-32, Wharton School Center for Financial Institutions, University of Pennsylvania.
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The Quarterly Journal of Economics,
MIT Press, vol. 118(4), pages 1169-1208, November.
- Bertrand, Marianne & Schoar, Antoinette, 2003. "Managing With Style: The Effect of Managers on Firm Policies," Working papers 4280-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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