Gender Equality and the Risk Assessment of Corporate Financialization: An Analysis of the Increase in the Proportion of Female Executives

Abstract

This paper empirically investigates the impact of the proportion of female executives on the financialization of enterprises using a sample of listed companies in the Shanghai and Shenzhen stock markets from 2009-2018. Previous studies tend to conclude that female executives are risk averse, preventing firms from participating in high-risk financial investments. However, the results of this paper show that there is a positive relationship between the proportion of female executives and the degree of corporate financialization, with an increase of 1 percent in the proportion of female executives leading to an increase of 3.8 percent in the degree of corporate financialization. Further tests show that gender inequality is a possible mechanism influencing female executives’ financial investment preferences in the unique gender culture context of China. This paper expands the research on the impact of non-institutional factors on corporate financialization, and also points out that unilaterally pursuing an increase in the proportion of female executives does not reduce the risk of corporate financialization, and that only an overall increase in the proportion of female executives can reduce the risk of corporate financialization. Improving gender equality at the social level can fundamentally reflect women’s risk aversion characteristics and encourage enterprises to make more stable investment decisions.