Local Gender Imbalance and Corporate Risk-Taking

We study the impacts of local gender imbalance on corporate risk-taking. We find that firms in areas with higher local male-female ratios have higher stock volatilities and leverage, less corporate hedging, and more capital expenditures. Consequently, such firms face higher loan spreads and more covenant restrictions. We address endogeneity concerns with two sets of instrumental variables: local male-female ratio at birth in 1960, and local mortality rates of prostate cancer and breast cancer. We show that both employee and local investor channels transit local residents' risk preferences embedded in gender imbalance