Are Women CEOs Valuable in Terms of Bank Loan Costs? Evidence from China

Original Paper


Given that women CEOs are usually more risk averse, engage less in opportunistic behavior, and provide higher quality earnings than men CEOs, we argue that firms with women CEOs are likely to face lower operational and information risk and thus enjoy cheaper external funds. Using a large sample of Chinese A-share listed firms operating from 2006 to 2012, we find consistent evidence that Chinese banks tend to impose lower loan costs on firms with women CEOs compared to firms with men CEOs. This effect is more pronounced (1) for non-state-owned enterprises than for state-owned enterprises, (2) for firms without political connections than for firms with political connections, and (3) during non-crisis periods. We do not find any significant effects for firms with women chairpersons, CFOs, or directors.


Bank loan costs China Financial crisis Gender diversity Women CEOs 



We acknowledge the financial support from the Chinese National Science Funds (Grant No. 71202061, 71572160, and 71672197), Program for New Century Excellent Talents in University of Fujian Province (2015), and Program for Cultivating Outstanding Young Research Talents in University of Fujian Province (2015). All remaining errors are our own.


  1. Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309.CrossRefGoogle Scholar
  2. Allen, F., Qian, J., & Qian, M. (2005). Law, finance, and economic growth in China. Journal of Financial Economics, 77(1), 57–116.CrossRefGoogle Scholar
  3. Allen, F., Qian, J., Zhang, C., & Zhao, M. (2012). China’s financial system: Opportunities and challenges. NBER Working Paper No. w17828.Google Scholar
  4. Altman, E. I., & Hotchkiss, E. (2006). Predict and avoid bankruptcy, analyze and invest in distressed debt (3rd ed.). New York: Wiley.Google Scholar
  5. Barua, A., Davidson, L. F., Rama, D. V., & Thiruvadi, S. (2010). CFO gender and accruals quality. Accounting Horizons, 24(1), 25–39.CrossRefGoogle Scholar
  6. Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97(2), 207–221.CrossRefGoogle Scholar
  7. Brei, M., & Schclarek, A. (2015). A theoretical model of bank lending: Does ownership matter in times of crisis? Journal of Banking & Finance, 50(1), 298–307.CrossRefGoogle Scholar
  8. Byrnes, J. P., Miller, D. C., & Schafer, W. D. (1999). Gender differences in risk taking: A meta-analysis. Psychological Bulletin, 125(3), 367–383.CrossRefGoogle Scholar
  9. Campbell, A., & Mínguez-Vera, A. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83(3), 435–451.CrossRefGoogle Scholar
  10. Carter, D. A., D’Souza, F., Simkins, B. J., & Simpson, W. G. (2010). The gender and ethnic diversity of US boards and board committees and firm financial performance. Corporate Governance: An International Review, 18(5), 396–414.CrossRefGoogle Scholar
  11. Chava, S., & Purnanandam, A. (2010). CEOs versus CFOs: Incentives and corporate policies. Journal of Financial Economics, 97(2), 263–278.CrossRefGoogle Scholar
  12. Chen, H., Chen, J. Z., Lobo, G. J., & Wang, Y. (2010). Association between borrower and lender state ownership and accounting conservatism. Journal of Accounting Research, 48(5), 973–1014.CrossRefGoogle Scholar
  13. Chen, P. F., He, S., Ma, Z., & Stice, D. (2016a). The information role of audit opinions in debt contracting. Journal of Accounting and Economics, 61(1), 121–144.CrossRefGoogle Scholar
  14. Chen, S., Ni, X., & Tong, J. Y. (2016b). Gender diversity in the boardroom and risk management: A case of R&D investment. Journal of Business Ethics, 136(3), 599–621.CrossRefGoogle Scholar
  15. Collins, D. (2000). The quest to improve the human condition: The first 1,500 articles published in Journal of Business Ethics. Journal of Business Ethics, 26(1), 1–73.CrossRefGoogle Scholar
  16. Conyon, M. J., & He, L. (2011). Executive compensation and corporate governance in China. Journal of Corporate Finance, 17(4), 1158–1175.CrossRefGoogle Scholar
  17. Costello, A. M., & Wittenberg-Moerman, R. (2011). The impact of financial reporting quality on debt contracting: Evidence from internal control weakness reports. Journal of Accounting Research, 49(1), 97–136.CrossRefGoogle Scholar
  18. Cumming, D., Leung, T., & Rui, O. (2015). Gender diversity and securities fraud. Academy of Management Journal, 58(5), 1572–1593.CrossRefGoogle Scholar
  19. Du, X., Weng, J., Zeng, Q., Chang, Y., & Pei, H. (2015). Do lenders applaud corporate environmental performance? Evidence from Chinese private-owned firms. Journal of Business Ethics. doi: 10.1007/s10551-015-2758-2.Google Scholar
  20. Faccio, M. (2006). Politically connected firms. American Economic Review, 96(1), 369–386.CrossRefGoogle Scholar
  21. Faccio, M., Marchica, M. T., & Mura, R. (2014). CEO gender and corporate risk-taking. Working Paper, Purdue University and Manchester Business School.Google Scholar
  22. Faccio, M., Masulis, R., & McConnell, J. (2006). Political connections and corporate bailouts. Journal of Finance, 61(6), 2597–2635.CrossRefGoogle Scholar
  23. Fan, J. P. H., Wong, T. J., & Zhang, T. (2007). Politically connected CEOs, corporate governance, and post-IPO performance of China’s newly partially privatized firms. Journal of Financial Economics, 84(2), 330–357.CrossRefGoogle Scholar
  24. Fernández, A. I., González, F., & Suárez, N. (2013). The real effect of banking crises: Finance or asset allocation effects? Some international evidence. Journal of Banking & Finance, 37(7), 2419–2433.CrossRefGoogle Scholar
  25. Firth, M., Lin, C., Liu, P., & Wong, S. M. L. (2009). Inside the black box: Bank credit allocation in China’s private sector. Journal of Banking & Finance, 33(6), 1144–1155.CrossRefGoogle Scholar
  26. Ford, R. E., & Richardson, W. D. (1994). Ethical decision making: A review of the empirical literature. Journal of Business Ethics, 13(3), 205–221.CrossRefGoogle Scholar
  27. Francis, B., Hasan, I., Park, J. C., & Wu, Q. (2015). Gender differences in financial reporting decision making: Evidence from accounting conservatism. Contemporary Accounting Research, 32(3), 1285–1318.CrossRefGoogle Scholar
  28. Francis, B., Hasan, I., & Wu, Q. (2013). The impact of CFO gender on bank loan contracting. Journal of Accounting, Auditing & Finance, 28(1), 53–78.CrossRefGoogle Scholar
  29. Fu, X., & Heffernan, S. (2009). The effects of reform on China’s bank structure and performance. Journal of Banking & Finance, 33(1), 39–52.CrossRefGoogle Scholar
  30. Ge, W., Matsumoto, D., & Zhang, J. L. (2011). Do CFOs have style? An empirical investigation of the effect of individual CFOs on accounting practices. Contemporary Accounting Research, 28(4), 1141–1179.CrossRefGoogle Scholar
  31. Giannetti, M., & Laeven, L. (2012). The flight home effect: Evidence from the syndicated loan market during financial crises. Journal of Financial Economics, 104(1), 23–43.CrossRefGoogle Scholar
  32. Godlewski, C. J. (2014). Bank loans and borrowers value during the global financial crisis: Empirical evidence from France. Journal of International Financial Markets, Institutions & Money, 28, 100–130.CrossRefGoogle Scholar
  33. Gul, F. A., Srinidhi, B., & Ng, A. C. (2011). Does board gender diversity improve the informativeness of stock prices? Journal of Accounting and Economics, 51(3), 314–338.CrossRefGoogle Scholar
  34. Hillman, A. J. (2005). Politicians on the board of directors: Do connections affect the bottom line? Journal of Management, 31(3), 464–481.CrossRefGoogle Scholar
  35. Ho, S. S., Li, A. Y., Tam, K., & Zhang, F. (2015). CEO gender, ethical leadership, and accounting conservatism. Journal of Business Ethics, 127(2), 351–370.CrossRefGoogle Scholar
  36. Hristov, N., Hülsewig, O., & Wollmershäuser, T. (2012). Loan supply shocks during the financial crisis: Evidence from the Euro area. Journal of International Money and Finance, 31(3), 569–592.CrossRefGoogle Scholar
  37. Hristov, N., Hülsewig, O., & Wollmershäuser, T. (2014). The interest rate pass-through in the Euro area during the global financial crisis. Journal of Banking & Finance, 48, 104–119.CrossRefGoogle Scholar
  38. Huang, J., & Kisgen, D. J. (2013). Gender and corporate finance: Are male executives overconfident relative to female executives? Journal of Financial Economics, 108(3), 822–839.CrossRefGoogle Scholar
  39. Huse, M., & Solberg, A. G. (2006). Gender-related boardroom dynamics: How Scandinavian women make and can make contributions on corporate boards. Women in Management Review, 21(2), 113–130.CrossRefGoogle Scholar
  40. Jia, M., & Zhang, Z. (2013). Critical mass of women on BODs, multiple identities, and corporate philanthropic disaster response: Evidence from privately owned Chinese firms. Journal of Business Ethics, 118(2), 303–317.CrossRefGoogle Scholar
  41. Jiang, F., & Kim, K. A. (2015). Corporate governance in China: A modern perspective. Journal of Corporate Finance, 32, 190–216.CrossRefGoogle Scholar
  42. Jiang, J. X., Petroni, K. R., & Wang, I. Y. (2010). CFOs and CEOs: Who have the most influence on earnings management? Journal of Financial Economics, 96(3), 513–526.CrossRefGoogle Scholar
  43. Kaplan, S., Pany, K., Samuels, J., & Zhang, J. (2009). An examination of the association between gender and reporting intentions for fraudulent financial reporting. Journal of Business Ethics, 87(1), 15–30.CrossRefGoogle Scholar
  44. Khwaja, A., & Mian, A. (2005). Do lenders favor politically connected firms? Rent provision in an emerging financial market. Quarterly Journal of Economics, 120(4), 1371–1411.CrossRefGoogle Scholar
  45. Kremp, E., & Sevestre, P. (2013). Did the crisis induce credit rationing for French SMEs? Journal of Banking & Finance, 37(10), 3757–3772.CrossRefGoogle Scholar
  46. Lam, K. C., McGuinness, P. B., & Vieito, J. P. (2013). CEO gender, executive compensation and firm performance in Chinese-listed enterprises. Pacific-Basin Finance Journal, 21(1), 1136–1159.CrossRefGoogle Scholar
  47. Li, H., & Zhang, Y. (2007). The role of managers’ political networking and functional experience in new venture performance: Evidence from China’s transition economy. Strategic Management Journal, 28(8), 791–804.CrossRefGoogle Scholar
  48. Lin, H. (2011). Foreign bank entry and firms’ access to bank credit: Evidence from China. Journal of Banking & Finance, 35(4), 1000–1010.CrossRefGoogle Scholar
  49. Lin, T. W. (2004). Corporate governance in China: Recent developments, key problems and solutions. Journal of Accounting and Corporate Governance, 1, 1–23.Google Scholar
  50. Liu, Q., & Lu, Z. J. (2007). Corporate governance and earnings management in the Chinese listed companies: A tunneling perspective. Journal of Corporate Finance, 13(5), 881–906.CrossRefGoogle Scholar
  51. Loe, T. W., Ferrell, L., & Mansfield, P. (2000). A review of empirical studies assessing ethical decision making in business. Journal of Business Ethics, 25(3), 185–204.CrossRefGoogle Scholar
  52. Lou, W., & Yin, X. (2014). The impact of the global financial crisis on mortgage pricing and credit supply. Journal of International Financial Markets, Institutions & Money, 29, 336–363.CrossRefGoogle Scholar
  53. Low, D. C. M., Roberts, H., & Whiting, R. H. (2015). Board gender diversity and firm performance: Empirical evidence from Hong Kong, South Korea. Malaysia and Singapore. Pacific-Basin Finance Journal, 35(Pt. A), 381–401.CrossRefGoogle Scholar
  54. Lu, Z., Zhu, J., & Zhang, W. (2012). Bank discrimination, holding bank ownership, and economic consequences: Evidence from China. Journal of Banking & Finance, 36(2), 341–354.CrossRefGoogle Scholar
  55. Maury, B., & Pajuste, A. (2005). Multiple large shareholders and firm value. Journal of Banking & Finance, 29(7), 1813–1834.CrossRefGoogle Scholar
  56. McCabe, A. C., Ingram, R., & Dato-On, M. C. (2006). The business of ethics and gender. Journal of Business Ethics, 64(2), 101–116.CrossRefGoogle Scholar
  57. McGuinness, P. B. (2016). IPO firm performance and its link with board officer gender, family-ties and other demographics. Journal of Business Ethics. doi: 10.1007/s10551-016-3295-3.Google Scholar
  58. Peng, M. W., & Luo, Y. (2000). Managerial ties and firm performance in a transition economy: The nature of a micro-macro link. Academy of Management Journal, 43(3), 486–501.CrossRefGoogle Scholar
  59. Petersen, M. A. (2004). Information: Hard and soft. NBER Working Paper.Google Scholar
  60. Peterson, R. (2009). Estimating standard error in finance panel data sets: Comparing approaches. Review of Financial Studies, 22(1), 435–480.CrossRefGoogle Scholar
  61. Pfeffer, J., & Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective. Stanford, CA: Stanford University Press.Google Scholar
  62. Post, C., & Byron, K. (2015). Women on boards and firm financial performance: A meta-analysis. Academy of Management Journal, 58(5), 1546–1571.CrossRefGoogle Scholar
  63. Robin, D., & Babin, L. (1997). Making sense of the research on gender and ethics in business: A critical analysis and extension. Business Ethics Quarterly, 7(4), 61–90.CrossRefGoogle Scholar
  64. Roxas, M. L., & Stoneback, J. Y. (2004). The importance of gender across cultures in ethical decision making. Journal of Business Ethics, 50(2), 149–165.CrossRefGoogle Scholar
  65. Shleifer, A., & Vishny, R. W. (1997). A survey of corporate finance. Journal of Finance, 52(2), 737–783.CrossRefGoogle Scholar
  66. Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644.CrossRefGoogle Scholar
  67. Stein, J. C. (2002). Information production and capital allocation: Decentralized vs. hierarchical firms. Journal of Finance, 57(5), 1891–1921.CrossRefGoogle Scholar
  68. Sun, P., Mellahi, K., & Wright, M. (2012). The contingent value of corporate political ties. Academy of Management Perspectives, 26(3), 68–82.CrossRefGoogle Scholar
  69. Sun, S. L., Zhu, J., & Ye, K. (2015). Board openness during an economic crisis. Journal of Business Ethics, 129(2), 363–377.CrossRefGoogle Scholar
  70. Swamy, A., Knack, S., Lee, Y., & Azfar, O. (2001). Gender and corruption. Journal of Development Economics, 64(1), 25–55.CrossRefGoogle Scholar
  71. Tate, G., & Yang, L. (2015). Female leadership and gender equity: Evidence from plant closure. Journal of Financial Economics, 117(1), 77–97.CrossRefGoogle Scholar
  72. Terjesen, S., Sealy, R., & Singh, V. (2009). Women directors on corporate boards: A review and research agenda. Corporate Governance: An International Review, 17(3), 320–337.CrossRefGoogle Scholar
  73. Tirole, J. (2006). The theory of corporate finance. Princeton, NJ: Princeton University Press.Google Scholar
  74. Valentine, S. R., & Rittenburg, T. L. (2007). The ethical decision making of men and women executives in international business situations. Journal of Business Ethics, 71(2), 125–134.CrossRefGoogle Scholar
  75. Wu, J., & Liu, M. (2011). The impact of managerial political connections and quality on government subsidies: Evidence from Chinese listed firms. Chinese Management Studies, 5(2), 207–226.CrossRefGoogle Scholar
  76. Ye, K., & Zhang, R. (2011). Do lenders value corporate social responsibility? Evidence from China. Journal of Business Ethics, 104(2), 197–206.CrossRefGoogle Scholar
  77. Ye, K., Zhang, R., & Rezaee, Z. (2010). Does top executive gender diversity affect earnings quality? A large sample analysis of Chinese listed firms. Advances in Accounting Incorporating Advances in International Accounting, 26(1), 47–54.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  • Jin-hui Luo
    • 1
  • Zeyue Huang
    • 1
  • Xue Li
    • 1
  • Xiaojing Lin
    • 1
  1. 1.School of ManagementXiamen UniversityXiamenPeople’s Republic of China

Personalised recommendations