Female CFOs and Relationship Lending: Implications From Gender Socialization Theory

This study examines the impact of CFO gender on the use of relationship lending. Building on gender socialization theory, we hypothesize that female CFOs, driven by communal values and a focus on stakeholder balance, are more inclined to utilize relationship lending to reduce conflicts between creditors and investors. We find that firms with female CFOs exhibit stronger lending relationships, including higher relationship loan frequency and amounts. These findings are robust to various model specifications, including difference‐in‐differences and instrumental variable approaches. Additionally, female CFOs are more likely to maintain borrowing relationships with lenders even after transitioning to different firms, suggesting female CFOs maintain personal relations with lenders. Loan purpose analysis shows that female CFOs avoid using relationship loans for risky activities such as mergers and acquisitions, takeovers, or leveraged buyouts. Collectively, these findings provide new evidence of the role of gender in shaping corporate financial practices and decision‐making.