Women on Corporate Boards: Good or Bad?
The University of Hong Kong - Faculty of Business and Economics
Technische Universität München (TUM)
March 30, 2016
AFA 2016 San Francisco Meetings Paper
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.
Number of Pages in PDF File: 55
Keywords: Female board representation, exogenous retirements, gender quota, firm value, glass ceiling
JEL Classification: G32, G34
Date posted: October 25, 2013 ; Last revised: March 31, 2016