Investing in Female Corporate Leadership

53 Pages Posted: 25 Apr 2017 Last revised: 11 May 2019

See all articles by Ming-Tsung Lin

Ming-Tsung Lin

De Montfort University; University of Manchester - Manchester Business School

Ser-Huang Poon

University of Manchester - Manchester Business School

Date Written: April 29, 2019

Abstract

Using the top 1000 US firms from 2002 to 2015 as a tradable stock universe, we replicate and backtest five market-traded gender-diverse portfolios. We find evidence that gender-diverse firms have smaller volatility. Moreover, the gender-risk relationship is non-linear, with optimal female board ratio at 24% or 2-3 female directors. This significant non-linear gender-risk reduction effect is found in 8 out of 10 industries. We find that a gender-diverse board strongly reduces diversity and governance concerns. Moreover, we establish strong evidence that the gender-risk reduction effect is channeled through positive CSR (Corporate Social Responsibility) performance.

Keywords: Board Gender Diversity, Female Corporate Leadership, Gender Diverse Investment, Corporate Social Responsibility

JEL Classification: G12, G24, C22, C23, C24, C31

Suggested Citation

Lin, Ming-Tsung and Poon, Ser-Huang, Investing in Female Corporate Leadership (April 29, 2019). Available at SSRN: https://ssrn.com/abstract=2958134 or http://dx.doi.org/10.2139/ssrn.2958134

Ming-Tsung Lin

De Montfort University ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Ser-Huang Poon (Contact Author)

University of Manchester - Manchester Business School ( email )

Crawford House
Oxford Road
Manchester, Manchester M13 9PL
United Kingdom
+44 161 275 4031 (Phone)
+44 161 275 4023 (Fax)

HOME PAGE: http://www.manchester.ac.uk/research/Ser-huang.poon/

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