Finance and Gender
Paper Session
Saturday, Jan. 4, 2025 10:15 AM - 12:15 PM (PST)
- Kai Li, University of British Columbia
Beyond Old Boys’ Clubs: Financial Analysts' Utilization of Professional Connections
Abstract
Women often lack the opportunity to enter exclusive social clubs, reaping fewer benefits from their social networks. We investigate, conditioning on having the opportunity to interact with the right people in a professional setting, whether women can better utilize connections for career performance and advancement than men. Using a unique dataset that documents when, where, and with whom a financial analyst interacts at investor conferences, we find that female analysts issue more accurate earnings forecasts than their male counterparts after establishing connections with the firm's executives. Further evidence suggests that female analysts overcome homophilly in interactions with executives and transform conference interactions into long-term relationships, enhancing forecast accuracy for up to three years. In addition, both the capital and labor markets recognize their superior ability to utilize connections. Our findings suggest that women capitalize on professional connections to their advantage, highlighting the benefits of promoting structured networking opportunities for women in professional environments.To Grant or Not to Grant: Inventor Gender and Patent Examination Outcomes
Abstract
The likelihood of a patent application being approved by the USPTO is significantly lower for female inventors than for male inventors, even within narrow technological groups. We investigate the reasons for this gap, focusing on the role of gender bias, and analyze the implications for the quality and value of the granted patents. We find that the gender gap in examiners’ first-action approval decisions declines significantly and becomes close to zero when inventor names are rare and thus more gender-blind. Additionally, granted patents authored by female inventors are associated with higher estimated market values, but this difference diminishes for the gender-blind group—a pattern also reflected in forward-citations. Consistent with the effects of statistical discrimination, gender gap in approval rates is smaller for more experienced inventors and in technological art units with higher female representation. We estimate that more than half of the residual gender gap in the patent grant rates (of 5.4%) can be attributed to gender bias, with the remainder likely due to female inventors’ greater tendency to abandon applications after receiving negative feedback. Our findings shed light on the causes of gender differences in patent examination outcomes and offer implications for policies aimed at creating a level playing field in patenting.Financing The Next VC-Backed Startup: The Role of Gender
Abstract
Is there a gender gap in the serial founding of VC-backed startups? Despite robust evidence linkingserial entrepreneurship to startup success, women comprise only 13.3% of VC-backed founders,
declining to just 4% among those who found three or more startups. We introduce a novel
empirical design that exploits within-startup variation to study this gap, comparing future funding
outcomes for men and women who co-founded the same startup. This approach, akin to twin
studies, controls for unobservable differences in startup quality and founder ability. We document
substantial gender gaps, both on average and following failure or success of the current startup.
Following failure, women are 22.5% less likely to found another VC-backed startup compared to
their cofounders who are men. Among those who do found another VC-backed firm, women raise
53.3% less capital following failure and 24.6% less following success. Using founder LinkedIn data
and pension fund supply shocks, we investigate potential demand- and supply-side drivers of these
gaps. We rule out lack of interest by women in founding new firms and find no evidence of gender
differences in founder quality. In fact, subsequent startups founded by women and men have
higher success probabilities despite the large funding gap. The gender gaps appear driven by
unequal treatment, particularly from new investors rather than existing ones. Our analysis reveals
striking negative spillovers following investors’ experiences with other women-founded startup
failures but no positive spillovers following their successes, consistent with theories of
stereotyping. These findings suggest potential efficiency gains from reducing frictions faced by
experienced women founders in accessing venture capital.
Discussant(s)
Xing Huang
,
Washington University-St. Louis
Lin Peng
,
CUNY-Baruch College
Bo Bian
,
University of British Columbia
Ayako Yasuda
,
University of California-Davis
JEL Classifications
- G0 - General