Credit ratings through the lens of facial attractiveness

This study examines the impact of the facial attractiveness of female executives on firms’ credit ratings, focusing on within-group differences. The analysis is based on 1,264 firm-quarter observations from 2018 to 2022 for NYSE- and NASDAQ-listed firms led by female executives. Creditworthiness is measured using Standard and Poor’s credit ratings, which serve as the dependent variable. Attractiveness is quantified through a facial attractiveness index (FAI) derived from facial geometry. Results indicate that a one unit increase in FAI is associated with a 0.66-point improvement in credit rating. The authors use various tests and measures to address robustness and endogeneity. They also compare these results with market driven credit default swaps to examine whether attractiveness influences market perceptions of default risk, in contrast to potentially biased credit ratings. Overall, the findings suggest that firms led by attractive female executives receive higher credit ratings than those led by executives with lower attractiveness score.