Board Gender Diversity, Innovation and Firm Performance

78 Pages Posted: 18 May 2015 Last revised: 1 Dec 2015

Jie Chen

Cardiff Business School

Woon Sau Leung

Cardiff Business School

Kevin P. Evans

Cardiff University - Cardiff Business School

Date Written: Nov 30, 2015

Abstract

We find that firms with more gender-diverse boards achieve greater innovative success. The results are not driven by endogenous matching between female directors and firms with high innovative potential. Investigating the underlying mechanisms, the positive effect of gender diversity on innovation is stronger when product market competition is lower and when managers are more entrenched, consistent with increased monitoring by female directors improving manager’s incentives to innovate. Furthermore, we find that although gender diversity does not enhance firm performance on average, it increases the performance of firms for which innovation and creativity play a particularly important role.

Keywords: Gender diversity; Board of directors; Innovation; Firm performance

JEL Classification: G30, G34, J16, O31, O34

Suggested Citation

Chen, Jie and Leung, Woon Sau and Evans, Kevin P., Board Gender Diversity, Innovation and Firm Performance (Nov 30, 2015). Available at SSRN: https://ssrn.com/abstract=2607295 or http://dx.doi.org/10.2139/ssrn.2607295

Jie Chen (Contact Author)

Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

HOME PAGE: http://business.cardiff.ac.uk/people/staff/jie-chen

Woon Sau Leung

Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, Wales CF10 3EU
United Kingdom
+44 (0)29 2087 6736 (Phone)

HOME PAGE: http://business.cardiff.ac.uk/people/staff/woon-sau-leung

Kevin P. Evans

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom
+ 44 (0) 29 2087 4558 (Phone)
+ 44 (0) 29 2087 4419 (Fax)

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