Rotman Management – April 2019

rotmanmagazine.ca / 43

Ran Duchin is a Professor of Finance and

Business Economics and the William A. Fowl-

er Endowed Professor at the Foster School

of Business, University of Washington. Mike

Simutin is an Associate Professor of Finance

and Associate Director of the International Centre for Pension

Management at the Rotman School of Management. Denis

Sosyura is an Associate Professor of Finance at Arizona State

University’s W.P. Carey School of Business. Their paper,

“The Origins and Real Effects of the Gender Gap: Evidence

from CEOs’ Formative Years”, is available online. It won the Best Paper

Award at the University of Colorado’s 2018 Front Range Finance Seminar.

Rotman faculty research is ranked #16 globally by the Financial Times.

that CEOs’ High School Gender Imbalance corresponds to a
difference of 140 basis points in the allocation of capital to male
and female managers.

COMMUNITY WHERE THE CEO GREW UP. We focused on the gender
imbalance in labour force participation, income and education
in the county where the CEO grew up. ‘Labour force participa-
tion gender imbalance’ was defined as ‘the difference between
male and female labour force participation rate’; while ‘income
gender imbalance’ was defined as ‘the difference between the
average income of men and women in the county where the
CEO grew up’ and ‘education gender imbalance’ was defined
as ‘the difference between the number of education years of
men and women in the county where the CEO grew up’. The
result: High gender imbalances in CEOs’ communities cor-
responded to 95 to 117 basis points less in annual capital being
allocated to female division managers than male division man-
agers. In contrast, the allocation to female and male managers
was not significantly different in firms run by CEOs who grew
up in communities with low gender imbalances. We also calcu-
lated a similar comprehensive index of community gender im-
balance and found that a high gender imbalance corresponds to
about 110 basis points less in annual capital obtained by female
division managers relative to their male counterparts.

In closing
The gender gap in capital allocations within organizations is
a very real phenomenon, and our evidence indicates that it is
driven by CEO characteristics that can be traced to the leader’s
formative years.
We are not the only researchers to study the effects of gen-
der and experience on leadership in organizations. Gompers

Pictured at left is Robert H. Ewald, CEO of Silicon Graphics.

Scans of yearbooks available from classmates.com identify

him as a 1965 graduate of Wooster High School in Reno,

Nevada.

Artifact 2: Yearbook Entry

The birth certificate for one of the CEOs in our sample.
In addition to the date and location of birth, it identifies
both parents, their ages, occupations and city of residence.

Artifact 1: Birth Certificate

and Wang found that a decision-maker’s parenting of daughters

leads to an increased propensity to hire female partners — re-

sulting in better performance outcomes; and Cronqvist and Yu

found that CEOs who experience the birth of a daughter tend to

increase spending on corporate social responsibility.

Other evidence suggests that gender and background influ-

ence the allocation of resources at a macro level by affecting na-

tional legislation and federal courts. And the effects go beyond

economics: Washington found that U.S. Congressmen’s expo-

sure to gender diversity via parenting daughters increases their

propensity to support policies on women’s rights; and Glynn and

Sen showed that U.S. Federal Court judges with more daughters

are more likely to support women’s issues in their case decisions.

Taken together, the evidence to date underscores the im-

portance of an individual’s education and familial factors for

decision-making across a variety of contexts, and the potential

for profound economic and societal implications.