Do Women Stay Out of Trouble? Evidence from Corporate Litigation

44 Pages Posted: 7 Jul 2015 Last revised: 2 Sep 2015

Binay Adhikari

Miami University

Anup Agrawal

University of Alabama - Culverhouse College of Commerce & Business Administration

James Malm

College of Charleston

Date Written: August 1, 2015

Abstract

We use a unique hand-collected dataset on corporate lawsuits to examine the effect of female representation in top management on corporate litigation. We find that firms with higher representation of women in the top management team face fewer lawsuits overall, particularly lawsuits related to product liability, environment, medical liability, labor and contracts. These results continue to hold under several alternative specifications and accounting for endogeneity using a novel instrument. The results are driven by the presence of multiple women in top management positions and are likely due to gender diversity in top management rather than an artifact of tokenism. Among firms with higher litigation risk, greater representation of female executives positively impacts the value of cash holdings. Overall, our results uncover an important and previously unidentified benefit of gender diversity in top management.

Keywords: Women executives, Gender diversity, corporate litigation

JEL Classification: G39, K41, Z10

Suggested Citation

Adhikari, Binay and Agrawal, Anup and Malm, James, Do Women Stay Out of Trouble? Evidence from Corporate Litigation (August 1, 2015). Available at SSRN: https://ssrn.com/abstract=2627846 or http://dx.doi.org/10.2139/ssrn.2627846

Binay Kumar Adhikari

Miami University ( email )

800 E. High Street
Oxford, OH 45056
United States
5135291560 (Phone)

Anup Agrawal (Contact Author)

University of Alabama - Culverhouse College of Commerce & Business Administration ( email )

Culverhouse College of Commerce
EFLS, Box 870224
Tuscaloosa, AL 35487-0224
United States
205-348-8970 (Phone)
205-348-0590 (Fax)

HOME PAGE: http://culverhouse.ua.edu/faculty/profile/4

James Malm

College of Charleston ( email )

Department of Finance
5 Liberty Street, Suite 416
Charleston, SC 29401
United States

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