Lehman Sisters: Female Bank Executives and Risk-Taking

Abstract

This paper studies the impact of female executives on risk-taking using US bank panel data from 2002 to 2010. It provides evidence that female executives reduce risk-taking in banks, but the risk-reduction becomes less effective during crisis years. We also find that a more balanced gender ratio has a greater impact on bank risk-taking than merely with the presence of female executive. The results are robust to alternative specifications of riskiness and instrument variable approach.

Keywords: Gender, Female, Bank Executive, Diversity, Risk-taking, Lehman Sister

JEL Classification: G21, G28, J16, J48