Board Gender Diversity and Informativeness of Stock Prices
58 Pages Posted: 18 Mar 2009
Date Written: March 17, 2009
Using idiosyncratic volatility as a proxy, we show that stock prices of firms with gender-diverse boards reflect more firm-specific information. The positive association between gender diversity and idiosyncratic volatility remains significant after controlling for corporate governance, earnings quality and institutional ownership. We interpret this finding as reflecting greater disclosure of firm-specific information by firms that have higher board gender diversity. This interpretation is further bolstered by evidence of more continuous disclosure in firms with gender-diverse boards. Further, we show that gender diversity exhibits substitutive relationships with earnings quality and institutional ownership in the determination of idiosyncratic volatility.
Keywords: Idiosyncratic volatility, Female director, Diversity, Governance, Transparency, Information flow
JEL Classification: G11, G14, G34
Suggested Citation: Suggested Citation