Female political leaders and R&D investment

Abstract

This study employs a difference-in-differences method to analyse how female political leaders affect corporate R&D investment. Our findings indicate that female political leaders exert a positive influence on R&D investments. Moreover, these positive effects are more pronounced among high-tech firms and those operating in developed economies, although they appear to be less significant for defence firms. Additionally, we demonstrate that the presence of female leaders correlates with a reduced rate of inventor emigration to other economies, suggesting that female leadership may contribute to the retention of skilled inventors. Consistent with these primary results, firms exhibit a decrease in R&D investment following the departure of female political leaders from office. Furthermore, during the tenure of female leaders, firms also tend to reduce their cash holdings. We explore potential channels and observe that female leadership results in less external conflict and thus promote R&D investment.