Economics and Accounting Honors Theses

Date of Creation

10-1-2018

Degree Type

Departmental Honors Thesis - Restricted Access

First Advisor

Professor Daniel Tortorice

Abstract

This paper questions if investors exhibit sexism through their investment decisions in regard to CEO Gender at the time of earnings report releases. This paper furthers ideas of previous papers which explain that investors favor male CEOs over female CEOs. This is primarily due to media attention on female CEOs gender rather than their accomplishments or ability to lead a company. Male CEOs have significantly more media attention on their accomplishments and abilities providing investors with a greater amount of background knowledge. Therefore, they typically invest in male lead companies at the time of CEO turnover. This paper looks to see if the same is true in regard to the life of the CEO through investments at the time of an earnings report release. The paper examines the 24 female lead companies in the S&P 500 index and 24 randomly selected male lead companies in the index. Over the course of one year (including 4 earnings reports per company) data was gathered 5 days prior to the report and 15 days after. This established a time frame in which “regular” data within the company was able to be established. From this analysis, it was found that there is no significant difference between the female and male lead companies. Still, there are results that further testing could verify. CEO gender does have a slightly negative effect on earnings results. If data was able to be gathered from more female lead companies throughout the stock exchange, there is a possibility that significant results could be formed. There also seems to be more stable returns on female lead companies when analysts predictions were incorrect. Again, while this data is not significant, further testing could provide greater information.

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