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
Date Written: May 17, 2018
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: Suggested Citation