Facial masculinity, risk preferences, and corporate hedging

We explore the influence of CEO and CFO facial masculinity, measured by the facial width-to-height ratio (fWHR), on the hedging decisions of a sample of oil and gas producers from 2009 to 2019. Our findings show a negative association between the fWHR and the hedging likelihood and extent, which is particularly pronounced when considering both executives. This effect is consistent with facial masculinity being linked to increased managerial risk-taking and leading to reduced corporate hedging. This evidence is robust to managerial compensation incentives and professional and demographic characteristics, survives multiple robustness checks, and is plausibly causal.