Gender Effect on Corporate Risk Taking

Abstract: In this thesis, data on 108 086 Swedish companies from the years 2008-2012 are examined to determine if there is a CEO gender effect on risk taking in corporations. The main risk measures chosen are Volatility in ROE, Volatility in ROA and Volatility in Leverage, intended to provide information about total risk, operational risk and financial risk. A linear regression model framework has been used in the study, controlling for several determinants of firm and personality characteristics. Firstly, results for the entire CEO population show no significant gender effect in any of the risk measures. Secondly, distinct results can be seen in companies with 1-10 employees, where the CEO gender effect decreases the volatility in all three risk measures. Thirdly, the industry comparisons show that female CEOs take lower risk if they are operating in an industry that is characterised by low risk, or if the fraction of female CEOs is high. This paper seems to be the first in Sweden to examine the CEO gender effect on corporate risk in all listed and unlisted companies