Gender-Diverse Boards and Firm Value: Evidence from the COVID-19 Pandemic
43 Pages Posted: 28 Jun 2021 Last revised: 5 Mar 2024
Date Written: October 16, 2022
Abstract
This paper studies the impact of board gender diversity on firm value during a crisis period. We provide robust evidence that stocks of firms with gender-diverse boards experienced higher abnormal returns when the negative market sentiment induced by the outbreak of the COVID-19 pandemic was at its peak. In cross-sectional analysis, we find that the documented effect was amplified among financially constrained firms, firms with a longer cash conversion cycle, and firms with higher information uncertainty, while it was mitigated among firms with higher managerial ability. Overall, our findings are consistent with the narrative that investors view gender diverse boards as being better equipped to monitor and advise management during such periods.
Keywords: Board gender diversity, Abnormal returns, Crisis, COVID-19
JEL Classification: G10, G30, M14
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