Drivers of Firm Innovation: The Role of Overconfidence and Gender in the C-Suite
Prevailing research suggests that firms led by female executives tend to be more risk-averse, a characteristic often linked to reduced corporate risk-taking. Given the critical role of risk-taking in fostering innovation, it would be natural to infer that such firms may lag in innovative pursuits. Challenging this oversimplification, I analyze the overlooked dimension of overconfidence among female executives. I find that firms with a larger share of overconfident females in the C-suite are more innovative – securing more patents, earning more citations, and increasing the monetary value of their patent portfolios. This effect is accentuated in innovation-driven industries. These results underscore the need for a more nuanced approach to examining how executive personal characteristics like overconfidence intersect with gender in shaping corporate innovation.