Stock Market Stereotypes Undervalue Female Directors in The Short-Term
New research into how the stock market perceives the capabilities of female company directors finds that an initial negative response by investors is overturned in the longer term, once markets respond to corporate performance rather than stereotypes.
The study analysed the stock market response to male and female directors’ purchases of their own company shares, examining both the short-run and long-run stock market reaction response to directors’ trades.
Results suggest that the price reaction to male directors’ share activity is initially faster and larger than that for female directors, showing that the short-term market reaction retains a gender bias reflecting the prevalence of negative stereotypes; where the market reacts to beliefs rather than performance. (more…)