Does Cooperation Among Women Enhance or Impede Firm Performance?

51 Pages Posted: 16 Aug 2017 Last revised: 14 Jul 2020

See all articles by Lu Xing

Lu Xing

University of Glasgow

Angelica Gonzalez

University of Edinburgh

Vathunyoo Sila

University of Edinburgh

Date Written: July 8, 2020

Abstract

Based on the notion that women cooperate more with women than with men, we investigate whether women managers work more effectively when monitored by women directors. We find that when a firm has women as its top managers, its accounting profitability increases with the proportion of women on the board of directors. However, the improvement in profitability is associated with earnings management. We show that women are likely to be appointed to precarious leadership positions, which puts pressure on them to ameliorate the weak earnings performance. Finally, consistent with the interaction between women resulting in an unfavourable response from investors, we document a negative stock market reaction to the appointment of female top managers in the presence of women on the board.

Keywords: Female interaction; top management; board of directors; firm performance; glass cliff

JEL Classification: G10, G34

Suggested Citation

Xing, Lu and Gonzalez, Angelica and Sila, Vathunyoo, Does Cooperation Among Women Enhance or Impede Firm Performance? (July 8, 2020). British Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3019524

Lu Xing (Contact Author)

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom

Angelica Gonzalez

University of Edinburgh ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Vathunyoo Sila

University of Edinburgh ( email )

29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom
+447428747109 (Phone)

HOME PAGE: http://https://www.business-school.ed.ac.uk/staff/ben-sila

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