The Influence of the Gender of the Chairman and CEO on the Company's Financial Leverage

Abstract

The number of female CEOs reached a historic high in 2014. It shows that women have a greater impact on a company, and more and more studies have explored the impact of female executives in a company. This study investigates how the gender of chairmen and CEOs affects corporate leverage in Taiwan through regression analysis with fixed effects. We especially focus on whether the firms operated by female chairpersons and female CEOs have more conservative financial policies or corporate leverage than the firms operated by male chairpersons or male CEOs’. Leverage and volatility are common measures of corporate risk-taking. The firms with higher leverage and volatility are regarded as the firms which are risky and more willing to take the risk. The firms with lower leverage and lower volatility are taken as the more stable firms. The empirical results show that the firms operated by female chairpersons have higher leverage and volatility. It indicates that female chairpersons are more aggressive than their male counterparts. However, the empirical results of CEOs are different from chairmen. The results show that the firms led by female CEOs have lower leverage. The figures show that female CEOs in Taiwan are more conservative than male CEOs. The empirical results also show that female chairpersons have more impact on corporate leverage and volatility.