1. Gender & Finance Literature Review Series
Prof. François Longin
Ms. Aatreyi Mitra
Prof. Estefania Santacreu-Vasut
ESSEC Business School
October 2017

2. Gender & Finance Literature Review Series Research presentation #2
Slides prepared by Aatreyi Mitra Member of the Gender & Finance project ESSEC Business School About the paper : PEGGY M. LEE and ERIKA HAYES JAMES (2007) “She’-E-Os: Gender Effects & Investor Reactions to the Announcements of Top Executive Appointments”
12/10/2017
Gender & Finance

3. The Problem Statistics from last 40 years show: Bad News: Good News:
No. of women managers increased from 18 % in
1972 to 45%
Bad News:
No. of women in Fortune represent 4% of top officers and less than half of 1% of CEOs.
The Glass Ceiling problem:
Women advance only upto to a certain level
12/10/2017
Gender & Finance

4. The Perception Females in executive roles are rare  “Token Status”
These women are sole representatives of their social category  “Solo Status”
These statuses affect the amount of attention they draw and how they are perceived
Further leads to biases and detrimental stereotypes
12/10/2017
Gender & Finance

5. Methodology
Lee & James (2007) studied the Stock market price fluctuations for set of firms in using:
1624 announcements, 529 CEO appointments
Information about the executive, reason for appointment, newspaper articles, press releases etc
A model using independent and control variables 1 & 0 for attributes as below- 1
Female
Male
Firm Insider
Firm Outsider
Unusual circumstances (ousting, performance, restructuring etc)
No unusual circumstances
Industry insider
Industry outsider
Prior CEO experience
No CEO experience previously
12/10/2017
Gender & Finance

6. Hypothesis 1
“Stock market reactions to the announcements of female CEO appointments will be more negative than that to the announcements of male CEO appointments”- Lee & James (2007)
Their analysis (in red) supported this Hypothesis as the 3 day cumulative returns was more negative for female CEOs than male.
12/10/2017
Gender & Finance

7. Hypothesis 2
“On average there will be more articles written in the popular press about
female CEOs than about male CEOs during their initial year in office.” -Lee & James (2007)
Their sources included NY Times, FT times, Forbes, Fortune, Business week & The Economist.
Their findings did not support this Hypothesis as there wasn’t significant difference in the mean number of articles for female CEOs than male CEOs.
12/10/2017
Gender & Finance

8. Hypothesis 3
“Reports about the appointment of a female CEO will depict information that highlights gender, gender-related, job and organizational considerations, whereas reports announcing the appointment of a male CEO will be neutral toward gender, and more job and organization focused”- Lee & James (2007)
Their analysis (in red) supported this Hypothesis. Egs- Words like “Family” was among top 10 words for women but ranked 52 for men.
12/10/2017
Gender & Finance

9. Hypothesis 4
“Stock market reactions to the announcements of female top management (TMT) appointments will be less negative than stock market reactions to the announcements of female CEO appointments.” -Lee & James (2007)
Their analysis (in red) supported this Hypothesis as the 3 day cumulative returns was more negative for female CEOs than female TMTs.
12/10/2017
Gender & Finance

10. Hypothesis 5
“Stock market reactions to the announcements of female top management appointments will not differ significantly from stock market reactions to the announcements of male top management appointments (TMT).” -Lee & James (2007)
Their analysis (in red) supported this Hypothesis as the 3 day cumulative returns was similar for female and male TMTs.
12/10/2017
Gender & Finance

11. Hypothesis 6
“Stock market reactions to announcements of female CEOs will be more
positive for women who are promoted from within the firm than for female outsiders.”- Lee & James (2007)
Their analysis using 4 models wherein model 2 & 4 the female was from within the firm supported this Hypothesis. The sum of gender & firm insider coefficients were found positive for these 2 models.
12/10/2017
Gender & Finance

12. Conclusion
The results indicate that shareholders respond more negatively
More negatively
Announcement of Female CEO appointments > male CEO appointments
female CEO appointments > female appointments in top management
Less negatively
women who are promoted to the CEO position from within the firm > promoted externally
12/10/2017
Gender & Finance

13. Implications
Women are perceived as violating gender role expectations due to the lack of reference
Media has to be more careful in their language
Stereotypes must change and will, once more women are appointed and it isn’t as rare anymore
Corporates have to aware of the potential risks with female executive appointment and strategize their communication to the media accordingly
12/10/2017
Gender & Finance

14. Limitations and future work
Event study method has low statistical power
Fortune 500 in 2005: only 7 female CEOs
Future research
Longitudinal design tracking stock market reactions
Diversity can be broadened beyond gender and include racial and ethnic
12/10/2017
Gender & Finance

15. References Do you want to learn more?
Kanter RM Men and Women of the Corporation.
Hitt MA, Barr SH Managerial selection decision models: examination of configural cue processing.
Eagly A, Karau S, Makhijani M Gender and the effectiveness of leaders: a meta-analysis.
Eagly A, Makhijani M, Klonsky B Gender and the evaluation of leaders: a meta-analysis.
McWilliams A, Siegel D Event studies in management research: theoretical and empirical issues.
Corman SR, Kuhn T, McPhee RD, Dooley KJ Studying complex discursive systems: centering resonance analysis of communication.
Fiske S, Taylor S Social Cognition
12/10/2017
Gender & Finance

16. Follow us and contact us!
Gender & Finance project
Facebook: Gender & Finance
Website:
François Longin
Website:
Estefania Santacreu-Vasut
Website: santacreuvasut.com
Aatreyi Mitra
12/10/2017
Gender & Finance

17. Gender & Finance project
Thank you !
12/10/2017
Gender & Finance