44 Pages Posted: 7 Jul 2015 Last revised: 2 Sep 2015
Date Written: August 1, 2015
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: 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