The Impact of CFO Gender on Bank Loan Contracting

Motivated by recent studies showing that female CFOs are more risk-averse than male CFOs when making various corporate decisions, the authors examine whether banks take into consideration the gender of CFOs when pricing bank loans. This article finds that in the sample, firms under the control of female CFOs on average enjoy about 11% lower bank loan prices than firms under the control of male CFOs. In addition, loans given to female-CFO-led companies have longer maturities and are less likely to be required to provide collateral than loans given to male-CFO-led companies. The results are robust to a series of robustness tests, such as a firm and year fixed-effect regression, a Heckman two-stage self-selection model, a propensity score-matching method, and a differences-in-differences approach. Overall, the results suggest that banks tend to recognize the role of female CFOs in providing more reliable accounting information ex ante and reducing default risk ex post, and grant firms with female CFOs lower loan prices and more favorable contract terms.