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Do Activist Hedge Funds Target Female CEOs? The Role of CEO Gender in Hedge Fund Activism

Using a comprehensive US hedge fund activism dataset from 2003 to 2018, we find that activist hedge funds are about 52% more likely to target firms with female CEOs compared to firms with male CEOs. We find that firm fundamentals, the existence of a “glass cliff,” gender discrimination bias, and hedge fund activists’ inherent characteristics do not explain the observed gender effect. We also find that the transformational leadership style of female CEOs is a plausible explanation for this gender effect: instead of being self-defensive, female CEOs are more likely to communicate and cooperate with hedge fund activists to achieve intervention goals. Finally, we find that female-led targets experience greater increases in market and operational performance subsequent to hedge fund targeting.

15. July 2021

Authors Bill Francis Iftekhar Hasan Yinjie (Victor) Shen Qiang Wu

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Professor Iftekhar Hasan, PhD
Professor Iftekhar Hasan, PhD
Economist

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