Academic Research Insight: How Women Affect Corporate Decision-Making

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Academic Research Insight: How Women Affect Corporate Decision-Making

By |2017-11-27T10:04:49+00:00November 27th, 2017|Basilico and Johnsen, Academic Research Insight|

Shaped by their daughters: Executives, female socialization, and corporate social responsibility

  • Henrik Cronqvist, Frank Yu
  • A version of this paper can be found here
  • Want to read our summaries of academic finance papers? Check out our Academic Research Insight category.

What are the research questions?

Research in social science has recently demonstrated the importance of the family environment for an individual’s behavior. Not only parents impact their children, but the opposite is also true. Additionally, there is a long-standing debate in economics and social psychology on whether women exhibit stronger social preferences compared to men. A pioneering study in sociology ( Warner, 1991) predicts that men parenting daughters may adopt preferences more similar to those of females.
Specifically, the authors investigate the following:
  1. Does a top decision makers’ (CEOs) family environment have a real impact on the firm they manage? Specifically, is there a CEO-daughter effect in the context of corporate social responsibility policies? That is, do male CEOs with daughters exhibit a higher propensity of managing firms that engage more in pro-CSR practices?

What are the Academic Insights?

By studying the largest public firms in the US from 1992 to 2012 and hand-collecting information on CEOs’ children, the authors find what follows:

  1. Yes, there is an economically sizeable and statistically significant relationship between a CEO parenting a daughter and corporate social responsibility policies. In particular, the CSR rating of a firm is 9.1% higher, compared to a medium firm, when a firm’s CEO has a daughter. In other words, the median firm with a CEO who has a daughter spends 10.4% per year of the firm’s net income on corporate social responsibility ( about an extra $43.5 million per year). An interesting corollary is that out of several CSR categories, the effects are stronger for Diversity, Environment, and Employee Relations

This result is robust to several endogeneity concerns.

Why does it matter?

This study is the first to emphasize the importance of the family environment in shaping CEOs. (Here is another piece on the subject).

The Most Important Chart from the Paper

The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged and do not reflect management or trading fees, and one cannot invest directly in an index.


Corporate executives managing some of the largest public companies in the U.S. are shaped by their daughters. When a firm’s CEO has a daughter, the corporate social responsibility rating is about 9.1% higher, compared to a median firm. The results are robust to confronting several sources of endogeneity, e.g., examining first-born CEO daughters and CEO changes. The relation is strongest for diversity, but significant also for broader pro-social practices related to the environment and employee relations. Our study contributes to research on female socialization, heterogeneity in CSR policies, and plausibly exogenous determinants of CEOs’ styles.

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Elisabetta Basilico, PhD, CFA
Dr. Elisabetta Basilico is a seasoned investment professional with an expertise in "turning academic insights into investment strategies." Research is her life's work and by combing her scientific grounding in quantitative investment management with a pragmatic approach to business challenges, she’s helped several institutional investors achieve stable returns from their global wealth portfolios. Her expertise spans from asset allocation to active quantitative investment strategies. Holder of the Charter Financial Analyst since 2007 and a PhD from the University of St. Gallen in Switzerland, she has experience in teaching and research at various international universities and co-author of articles published in peer-reviewed journals. She and co-author Tommi Johnsen are currently writing a book on research-backed investment ideas. You can find additional information at Academic Insights on Investing.
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