Product Markets, Gender, and Investment Behavior

We examine firms that primarily target male or female consumers and find that female (male) households overweight female (male)-focused firms. Females’ investment returns slightly outperform men, but they significantly underperform when investing in female-focused firms. Females trade less than men, but their trading activity increases to match men in female-focused firms. We observe weaker, but similar patterns among institutional investors, indicating that even professional investors are influenced by gender-based preferences. Our findings support domain-specific overconfidence among female investors when investing in firms they are more familiar with and where they may perceive having expertise.