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Are Women More Likely to Seek Advice than Men? Evidence from the Boardroom

Maurice Levi (), Kai Li () and Feng Zhang ()
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Maurice Levi: Sauder School of Business, University of British Columbia, 2053 Main Mall, Vancouver, BC V6T 1Z2, Canada
Kai Li: Sauder School of Business, University of British Columbia, 2053 Main Mall, Vancouver, BC V6T 1Z2, Canada
Feng Zhang: David Eccles School of Business, University of Utah, 1655 East Campus Center Drive, Salt Lake City, UT 84112, USA

Journal of Risk and Financial Management, 2015, vol. 8, issue 1, 1-23

Abstract: It is commonly believed that women are more likely to seek advice than men; for example, on aspects of health or asking for directions when lost. This paper investigates whether women’s relatively greater propensity for advice seeking extends to important business decisions, specifically those involving corporate takeovers. Consistent with the evidence from other contexts, we show that the presence of female directors on target boards is positively and significantly associated with target boards seeking advice from top-ranked financial advisors. In contrast, we do not observe any significant association between the presence of female directors on bidder boards and their engagement of top-ranked financial advisors. We argue that the presence of a gender effect for target boards but not for bidder boards is consistent with less overconfident female versus male directors on bidder boards initiating fewer bids, higher litigation risk facing target boards for accepting too little, and the different type of advice sought by bidders and target firms.

Keywords: seeking advice; financial advisors; director gender; overconfidence; takeovers (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2015
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