Female Board Representation, Corporate Innovation and Firm Performance

55 Pages Posted: 18 May 2015 Last revised: 2 Aug 2018

See all articles by Jie Chen

Jie Chen

Leeds University Business School, University of Leeds

Woon Sau Leung

University of Edinburgh - Edinburgh Business School

Kevin P. Evans

Cardiff University - Cardiff Business School

Date Written: July 18, 2018

Abstract

We show evidence that female board representation is associated with greater innovative success, and thus enhances firm performance in innovation-intensive industries. Firms with female directors tend to invest more in innovation and obtain more patents and citations for given R&D expenditures. An increase of 10 percentage points in the tenure-weighted fraction of female directors is associated with approximately 6% more patents and 7% more citations. Investigating the underlying mechanisms, the positive association between female board representation and corporate innovation is stronger when product market competition is lower and when managers are more entrenched, consistent with increased monitoring by female directors improving managers’ incentives to innovate. Furthermore, we find that female board representation is positively associated with performance only for firms for which innovation and creativity play a particularly important role.

Keywords: Female board representation; Board of directors; Corporate innovation; Firm performance

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

Suggested Citation

Chen, Jie and Leung, Woon Sau and Evans, Kevin P., Female Board Representation, Corporate Innovation and Firm Performance (July 18, 2018). Journal of Empirical Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2607295 or http://dx.doi.org/10.2139/ssrn.2607295

Jie Chen (Contact Author)

Leeds University Business School, University of Leeds ( email )

Leeds LS2 9JT
United Kingdom

HOME PAGE: http://https://business.leeds.ac.uk/about-us/our-people/staff-directory/profile/jie-chen-1/

Woon Sau Leung

University of Edinburgh - Edinburgh Business School ( email )

29 Buccleuch Pl
Edinburgh, Scotland EH8 9JS
United Kingdom

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)

Register to save articles to
your library

Register

Paper statistics

Downloads
917
Abstract Views
4,047
rank
24,533
PlumX Metrics