Women on Corporate Boards: Good or Bad?

AFA 2016 San Francisco Meetings Paper

55 Pages Posted: 25 Oct 2013 Last revised: 31 Mar 2016

Thomas Schmid

The University of Hong Kong - Faculty of Business and Economics

Daniel Urban

Technische Universität München (TUM)

Date Written: March 30, 2016

Abstract

Prior literature shows that mandatory gender quotas reduce firm value. However, little is known about causal effects of voluntary female board representation. Based on long and short-run event studies around exogenous board member retirements due to death and illness, we find a positive valuation effect of women. Further evidence from an international sample of 35,000 firms confirms this result. Higher firm valuation is not driven by women per se, but stems from more rigorous selection, the so-called "glass ceiling". Thus, firms would be well-advised to foster the voluntary promotion of women, also to avoid the introduction of value-destroying gender quotas.

Keywords: Female board representation, exogenous retirements, gender quota, firm value, glass ceiling

JEL Classification: G32, G34

Suggested Citation

Schmid, Thomas and Urban, Daniel, Women on Corporate Boards: Good or Bad? (March 30, 2016). 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 (Contact Author)

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

Pokfulam Road
Hong Kong
China

Daniel Urban

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, 80333
Germany

HOME PAGE: http://www.fm.wi.tum.de

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