Do Women Managers Keep Firms out of Trouble? Evidence from Corporate Litigation and Policies

64 Pages Posted: 7 Jul 2015 Last revised: 25 Sep 2018

See all articles by Binay Adhikari

Binay Adhikari

University of Texas at San Antonio

Anup Agrawal

University of Alabama - Culverhouse College of Commerce & Business Administration

James Malm

College of Charleston

Date Written: September 24, 2018

Abstract

We find that firms where women have more power in the top management team, measured by female executives’ plurality and pay slice, face fewer operations-related lawsuits. This effect is robust to several treatments of endogeneity and does not appear to be driven by female executives' greater willingness to settle the cases. Evidence from a simultaneous equations approach suggests that firms where women executives have more power avoid lawsuits partly by avoiding some risky but value-increasing firm policies, such as more aggressive R&D, intensive advertising, and policies inimical to other parties.

Keywords: Women executives, Corporate litigation, Corporate policies

JEL Classification: G39, K41, Z10

Suggested Citation

Adhikari, Binay Kumar and Agrawal, Anup and Malm, James, Do Women Managers Keep Firms out of Trouble? Evidence from Corporate Litigation and Policies (September 24, 2018). Journal of Accounting & Economics (JAE), Forthcoming, 2019, Available at SSRN: https://ssrn.com/abstract=2627846 or http://dx.doi.org/10.2139/ssrn.2627846

Binay Kumar Adhikari

University of Texas at San Antonio ( email )

1 UTSA Circle
San Antonio, TX 78249
United States
2104585349 (Phone)

Anup Agrawal (Contact Author)

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

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

HOME PAGE: http://aagrawal.people.ua.edu/

James Malm

College of Charleston ( email )

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

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