Beyond Biology? - The Impact of CEO Agency on Investor Reactions during an IPO

• Applicant: Dr. Simone Eulitz
• Subject Area: Accounting and Finance
• Term: from 2019 to 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 437333593

Leadership at the top of firms is largely performed by men. One reason for this male dominance in top leadership positions has been found in the congruity of male gender and leadership roles. Such gender roles are "consensual beliefs" about traits that are associated with either women or men. Male gender roles are associated with agentic behavior, such as dominance, ambition, and assertiveness, rendering them almost congruent with traditional leadership roles in our society. In contrast, women are expected to show communal traits, such as sympathy, affection, and kindness. These traits stand in sharp contrast to what is deemed necessary for a good leader. Not surprisingly, variations from the male leadership prerogative can seldom be found in the corporate landscape.This project aims to research gender effects on investor reactions by taking the "vice" as a “virtue" and directly focusing on deviations from the male leadership prerogative. Building on the idea of the congruity of agentic male gender roles and leadership roles, we aim to investigate the relationship between a CEO’s compliance with agentic male gender roles and investors reactions during an Initial Public Offering (IPO). We seek to examine the compliance with agentic male gender roles independently of whether it is to be found in male or female CEOs. We argue that investors will appreciate CEOs acting in line with male gender and, therefore, traditional leadership roles. We will apply a mixed method approach to gain a better understanding of investor reactions to CEO agentic behavior during an IPO. In a first step we will use a video analysis of speeches of CEOs held during road show events around the time of the firm’s IPO to infer a CEO’s compliance with male gender roles. Based on the derived "agency Rating" of the CEOs, we will investigate the impact of CEO agency on investor reactions. In a second step we will replicate the video study in a controlled setting to get an understanding of the mechanisms behind the effects found in study 1, and to investigate how the agentic male gender role interacts with biological sex. In this controlled setting, we will test whether the appreciation of CEO agentic behavior follows the same patterns for both sexes.

• DFG Programme: Research Fellowships
• International Connection: USA
• Host: Professorin Madeline Heilman, Ph.D.