The Economic Consequences of a 'Glass-Ceiling': Women on Corporate Boards and Firm Value

AFA 2016 San Francisco Meetings Paper

56 Pages Posted: 25 Oct 2013 Last revised: 20 May 2018

Thomas Schmid

The University of Hong Kong - Faculty of Business and Economics

Daniel Urban

Technical University of Munich

Date Written: May 17, 2018

Abstract

To investigate how women on corporate boards affect firm value, we analyze capital market reactions to exogenous board member departures due to death or illness. The market reacts about one percentage point more negatively to departures of women compared to men. An analysis of several potential explanations indicates that this negative reaction is more pronounced in countries where the selection of women is more stringent and fewer women serve on boards. This supports the "glass-ceiling" hypothesis which predicts that a more rigorous selection of female board members leads to superior qualifications of those few who make it to the top.

Keywords: Female board representation, exogenous departures, firm value, glass-ceiling

JEL Classification: G32, G34

Suggested Citation

Schmid, Thomas and Urban, Daniel, The Economic Consequences of a 'Glass-Ceiling': Women on Corporate Boards and Firm Value (May 17, 2018). AFA 2016 San Francisco Meetings Paper. Available at SSRN: https://ssrn.com/abstract=2344786 or http://dx.doi.org/10.2139/ssrn.2344786

Thomas Schmid

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Daniel Urban (Contact Author)

Technical University of Munich ( email )

Arcisstrasse 21
Munich, 80333
Germany

HOME PAGE: http://www.danielurban.org

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