Board Gender Diversity and Informativeness of Stock Prices

58 Pages Posted: 18 Mar 2009

See all articles by Ferdinand A. Gul

Ferdinand A. Gul

Monash University Sunway Campus

Bin Srinidhi

University of Texas at Arlington - Department of Accounting; City University of Hong Kong (CityUHK) - Department of Accountancy

Anthony C. Ng

Monash University; Monash University

Date Written: March 17, 2009

Abstract

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

Gul, Ferdinand A. and Srinidhi, Bin and Ng, Anthony C., Board Gender Diversity and Informativeness of Stock Prices (March 17, 2009). Available at SSRN: https://ssrn.com/abstract=1361528 or http://dx.doi.org/10.2139/ssrn.1361528

Ferdinand A. Gul

Monash University Sunway Campus ( email )

Jalan Lagoon Selatan
Selangor Darul Ehsan
Bandar Sunway, 46150
Malaysia

Bin Srinidhi (Contact Author)

University of Texas at Arlington - Department of Accounting ( email )

Arlington, TX 76013
United States

City University of Hong Kong (CityUHK) - Department of Accountancy ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
China

Anthony C. Ng

Monash University ( email )

Caulfield Campus
900 Dandenong Road
Caulfield East, VIC 3145
Australia

Monash University ( email )

Caulfield Campus
900 Dandenong Road
Caulfield East, VIC 3145
Australia

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