Girls will be girls? The gendered effect of economic policy uncertainty on corporate investment

Caroline Perrin and Laurent Weill

Applied Economics, 2024, vol. 56, issue 9, 997-1011

Abstract: We examine the effect of CEO gender on the relationship between economic policy uncertainty (EPU) and corporate investment. Using the newspaper-based EPU index developed by Baker, Bloom, and Davis (2016), we perform an empirical investigation on firm-level data of more than 38,000 firms from eight European countries for 2010–2019. We find evidence that higher EPU is associated with higher corporate investment. However, we show that this beneficial effect of economic policy uncertainty is lower when the firm CEO is a woman. We explain this finding by the higher risk aversion of women relative to men. Our work contributes to the debate on the impact of EPU on firm corporate decisions by bringing upfront the influence of CEO gender.

Date: 2024
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Working Paper: Girls Will Be Girls? The Gendered Effect of Economic Policy Uncertainty on Corporate Investment (2021)
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DOI: 10.1080/00036846.2023.2174935

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