Theme: A Tale of Two Judgments: The Joint Effect of CEO Gender and Explanation Plausibility on Retail Investors and Analysts

Speaker: Bo Zhou (School of Accounting, Shanghai University of Finance and Economics)

Host: Lei Chen (School of Accounting, SWUFE)

Time: 10:00-11:30 a.m., March 12, 2025, Wednesday

Place: Room 650, Chengzheng Building, Liulin Campus

Sponsor: Academic Research Office, School of Accounting

Introduction of the speaker:

Bo Zhou, Deputy Dean and Associate Professor at the School of Accounting, Shanghai University of Finance and Economics, doctoral supervisor, national high-level talentholds, Ph.D. in Accounting from Nanyang Technological University. Her primary research focuses on the judgment and decision-making processes of accounting information providers, users, and capital market intermediaries, as well as how institutional and environmental characteristics influence these judgments and decisions. Her research findings have been published in prestigious domestic and international journals such as the Accounting Review, Journal of Accounting Research, Management World, and Accounting Research.

Abstract:

Retail investors and analysts are both important market participants. This paper investigates how CEO gender affects their reactions to corporate performance attributions. Drawing on role congruity theory, recent accounting research suggests that female CEOs and analysts are penalized for behaviors perceived as incongruent with traditional gender roles. This study extends prior research by exploring the boundary conditions under which role congruity theory applies, employing two experiments that manipulate Explanation Plausibility (plausible versus implausible) and CEO Gender (male versus female). Experiment 1 reveals that retail investors, who are socially more distant from CEOs, penalize male CEOs more harshly for providing implausible explanations, whereas female CEOs do not face similar penalties. These findings align with double standard theory. Experiment 2 demonstrates that analysts, who are socially more proximate to CEOs, assign higher risk assessments to female CEOs compared to male CEOs even when plausible explanations are offered. These results highlight distinct forms of gender bias among different market participants and provide critical insights into how gender stereotypes shape investment-related judgments. The findings have significant implications for investors, corporate communication strategies, and market regulators, offering guidance on addressing gender-based biases in financial markets.