Gender equality in finance

Gender equality in finance

With François Longin and ESSEC Knowledge Editor-in-chief

The fight for gender equality needs to happen on all fronts, including finance. Gender inequality remains rife in the finance industry: a 2020 European Commission report noted that in 2018, venture capital backed tech companies with all-male founders received 93% of capital, with 5% going to mixed teams and 2% to all-female teams  (1). While women are employed in the finance industry, they are underrepresented in top leadership positions, with a 2020 Oliver Wyman study on 460 firms in 37 countries indicating that women represent 20% of executive committees and 23% on boards (2). To better understand the gendered nature of finance, ESSEC professors François Longin and Estefania Santacreu-Vasut established the Gender and Finance project, aiming to shed light and share information on gender in finance. 

A tale of two CEOs

One of their research efforts explored the stock market reaction to the appointment of female CEOs (3, 4). Stock markets tend to react poorly to female CEO appointments, and Longin and Santacreu-Vasut sought to better understand this phenomenon. They used a lab experiment in which participants (business school students) used SimTrade, a simulation trading platform developed by Dr. Longin, and compared how male and female participants reacted to the appointment of a male vs. a female CEO, i.e. whether they bought or sold stocks. Their experimental approach was designed to “unblind” finance: since it was conducted in a controlled environment, the researchers were able to identify the traders (and their gender), and able to control contextual information like what they knew about the company and when they learned about the CEO appointment. 

Data analysis revealed that when a female CEO was appointed, female participants tended to buy stocks, while males tended to sell stocks. The reverse occurred following the appointment of a male CEO: women sold stocks and men bought them. The researchers also calculated the critical threshold that is required for a “neutral” market reaction: for a neutral reaction after a female CEO is appointed, a critical threshold of 82% female is required, whereas for a neutral reaction after a male CEO is appointed, the critical threshold falls to 43% female, showing that the market gender bias is greater for female CEOs. This shows clearly that women and men react differently to the appointment of female CEOS. 

These results highlight the impact of the market’s gender composition: as the financial market is still dominated by men, a company’s stock could suffer following the appointment of a female CEO.It also shows that this could become a self-fulfilling prophecy: if stockbrokers expect stock prices to behave in a certain way after the appointment of a CEO, they might decide to buy or sell accordingly. This could perpetuate gender stereotypes and gender inequality. By raising awareness about this phenomenon, particularly in management education, it is possible to combat stereotyping and bring about positive change. 

The language of microfinance

Dr. Santacreu-Vasut continued to shed light on gender in finance in a 2020 paper examining the global microfinance industry (5), co-written with Israel Drori (Department of Organization Studies, Vrije Universiteit Amsterdam), Ronny Manos (School of Business, College of Management Academic Studies, Israel), and Amir Shoham (Fox School of Business, Temple University). In their recent study, they examined how the global microfinance industry determined its targeting strategy in cultures with different gender values, using male/female grammatical distinctions as a proxy. Microfinance is an innovative strategy for combating inequality: it consists of providing financial services, like loans, to individuals who are unable to access traditional banking services. There is a particular focus on empowering women, the idea being that it encourages entrepreneurship and therefore self-reliance and improved financial circumstances. It follows, then, that microfinance institutions will develop their targeting strategies accordingly in order to adapt to the local cultural context and optimize their social benefit.

To explore this question, the researchers looked at data from three sources: data on language and the gender index classifying gendermarking (6), data on microfinance institutions, and data on the countries in which microfinance institutions operate. All in all, the sample included over 2200 microfinance institutions representing 101 countries over a 15-year period from 2003-2017.

The researchers found that cultural values do influence the targeting strategy taken by microfinance institutions, in that they do tend to target women in locations where they are especially likely to be excluded from traditional financial services, and less likely to target women in regions where discrimination is lower. They found that languages with higher degrees of gender marking, meaning where speakers have to make male vs. female distinctions more frequently are associated with higher degrees of gender discrimination: this method for measuring cultural values offers a methodologically sound way to measure culture. These findings show that microfinance institutions adapt to best serve their overarching mission of empowering women, and focus their efforts on contexts where women are especially discriminated against and unable to access traditional banking services. 

Knowledge is power

To combat gender inequality, we need to understand how it plays out in different settings. With their gender and finance project, Dr. Longin and Dr. Santacreu-Vasut seek to understand the interplay of gender and finance to identify and debunk stereotypes and raise awareness in the leaders of tomorrow. Thanks to the microfinance research of Dr. Santacreu-Vasut and her colleagues, we also gain understanding of how cultural context impacts how financial outreach unfolds in a real-world setting. Research on gender and finance, like the studies discussed here, provides insights for the fight for equality. 


  1. Skonieczna, A., & Castellano, L. (2020). Gender Smart Financing Investing In and With Women: Opportunities for Europe (No. 129). Directorate General Economic and Financial Affairs (DG ECFIN), European Commission. 

  2. Jessica Clempner, Michelle Daisley, and Astrid Jaekel, Women in Financial Services 2020: A Panoramic Approach (Oliver Wyman, 2019)

  3. Longin, F., & Santacreu-Vasut, E. Stock Market Reaction to Female CEO Nominations: Is the Market Gendered? Accessed at: 

  4. Longin, F., & Santacreu-Vasut, E. (2019). Is Gender in the Pocket of Investors? Identifying Gender Homophily Towards CEOs in a Lab Experiment. Available at SSRN: or

  5. Drori, I., Manos, R., Santacreu-Vasut, E., & Shoham, A. (2020). How does the global microfinance industry determine its targeting strategy across cultures with differing gender values?. Journal of World Business, 55(5), 100985. 

  6. Santacreu-Vasut, E., Shoham, A., & Gay, V. (2013). Do female/male distinctions in language matter? Evidence from gender political quotas. Applied Economics Letters, 20(5), 495-498.

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