Research Discussion Papers, Bank of Finland
No 18/2011:
The impact of CFO gender on bank loan contracting
Bill Francis, Iftekhar Hasan ()
and Qiang Wu
Abstract: Motivated by recent studies that show female CFOs are more
risk averse than male CFOs when making various corporate decisions, we
examine whether banks take into consideration the gender of CFOs when
pricing bank loans. We find that in our sample, firms under the control of
female CFOs on average enjoy about 11% lower bank loan price than firms
under the control of male CFOs. In addition, loans given to female CFO-led
companies have longer maturities and are less likely to be required to
provide collateral than loans given to male CFO led companies. Our results
are robust to a series of robustness tests, such as a firm and year-fixed
effect regression, a Heckman two-stage self selection model, a propensity
score match method and a differences-in-differences approach. Overall, our
results suggest that banks tend to recognize the role of female CFOs in
providing more reliable accounting information ex ante and reducing default
risk ex post, and grant firms with female CFOs lower loan price and more
favourable contract terms.
Keywords: CFOs; gender; accounting information; bank loans; (follow links to similar papers)
JEL-Codes: G21; J16; M41; (follow links to similar papers)
61 pages, October 4, 2011
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