Henrik Cronqvist is Professor of Finance at University of Miami and Frank Yu is Associate Professor of Finance at China Europe International Business School (CEIBS). This post is based on their recent article, forthcoming in the Journal of Financial Economics.
“You’ve already given us a reason to reflect on the world we hope you live in.”
—Facebook’s CEO Mark Zuckerberg in “A letter to our daughter.”
Research in social science has recently demonstrated the importance of the family environment for an individual’s behavior. For example, parents may impact their children by instilling certain values in them. Some emerging work has suggested that the opposite may also be important: Children may shape their parents. In this article, we examine whether one category of top decision-makers, namely corporate executives managing some of the largest public companies in the U.S., is systematically affected by their family environment, in particular by parenting a daughter. Evidence for such a female socialization hypothesis has recently been reported for other categories of top decision-makers, including congress members and federal judges in the U.S., so our study expands this hypothesis into research in financial economics related to corporate executives.