Share Buybacks and Gender Diversity
33 Pages Posted: 25 Jul 2016 Last revised: 28 Jun 2017
Date Written: June 27, 2017
We find that board gender diversity increases the likelihood that firms announce a buy-back but long-term excess returns are signficantly smaller when there is larger female representation on the board. This is consistent with the governance hypothesis: gender diversity makes it more likely that firms buy back stock to reduce agency costs of free cash flow. But because gender diversity improves the quality of public information disclosure repurchases are less driven by market timing. Moreover, when the quality of monitoring is lower because board members sit on many other boards, long-term excess returns are larger.
Keywords: Gender Diversity, Share Buybacks, Market Timing, Ethics
JEL Classification: G3
Suggested Citation: Suggested Citation