Female leadership and bank risk-taking: Evidence from the effects of real estate shocks on bank lending performance and default risk

Ajay Palvia, Emilia Vähämaa, Sami Vähämaa*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

4 Citations (Scopus)

Abstract

This paper examines whether banks with female Chief Executive Officers (CEOs) and chairpersons of the board are associated with better lending performance and lower default risk when faced with severe real estate price shocks. Using a large panel of U.S. commercial banks, we document that female-led banks with high real estate exposure are associated with lower loan charge-offs and lower non-accrual loans relative to similar male-led banks. Furthermore, our empirical findings indicate that female-led banks with high real estate exposure have lower default risk and are less likely to fail in the aftermath of real estate price shocks. However, we find no evidence of superior lending performance or reduced default risk for female-led banks which are not exposed to severe real estate price shocks through high levels of real estate lending.
Original languageEnglish
Peer-reviewed scientific journalJournal of Business Research
Volume117
Pages (from-to)897-909
Number of pages13
ISSN0148-2963
DOIs
Publication statusPublished - 14.05.2020
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • female CEOs
  • chairwomen
  • lending performance
  • loan losses
  • default risk
  • bank failures

Fingerprint Dive into the research topics of 'Female leadership and bank risk-taking: Evidence from the effects of real estate shocks on bank lending performance and default risk'. Together they form a unique fingerprint.

Cite this