Female leadership and bank risk-taking: Evidence from the effects of real estate shocks on bank lending performance and default risk

Ajay Palvia, Emilia Vähämaa and Sami Vähämaa

Journal of Business Research, 2020, vol. 117, issue C, 897-909

Abstract: This paper examines whether banks with female Chief Executive Officers (CEOs) and chairpersons of the board are associated with better lending performance and lower default risk when faced with severe real estate price shocks. Using a large panel of U.S. commercial banks, we document that female-led banks with high real estate exposure are associated with lower loan charge-offs and lower non-accrual loans relative to similar male-led banks. Furthermore, our empirical findings indicate that female-led banks with high real estate exposure have lower default risk and are less likely to fail in the aftermath of real estate price shocks. However, we find no evidence of superior lending performance or reduced default risk for female-led banks which are not exposed to severe real estate price shocks through high levels of real estate lending.

Keywords: Female CEOs; Chairwomen; Lending performance; Loan losses; Default risk; Bank failures (search for similar items in EconPapers)
JEL-codes: G01 G21 G30 G32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:117:y:2020:i:c:p:897-909

DOI: 10.1016/j.jbusres.2020.04.057

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