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Girls Will Be Girls? The Gendered Effect of Economic Policy Uncertainty on Corporate Investment

Caroline Perrin and Laurent Weill ()
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Caroline Perrin: LaRGE Research Center, Université de Strasbourg

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: We examine the effect of CEO gender on the relation 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 main results are robust to a battery of sensitivity tests. Our work contributes to the debate on the impact of EPU on firm corporate decisions by bringing upfront the influence of CEO gender.

Keywords: Economic policy uncertainty; firm investment; CEO gender. (search for similar items in EconPapers)
JEL-codes: G30 G32 J16 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cfn, nep-cwa, nep-eur, nep-gen and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2021-04

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