Board Gender Diversity and its Effects on Capital Markets: New International Evidence

Abstract

There is considerable cross-country and within-country variation in female board representation. We analyze the effect of board gender diversity on firms’ market performance in an international setting. Our results, controlling for the endogenous nature of board appointments, exhibit that board gender diversity has no significantly positive or negative effect on long-term changes in shareholder wealth. Moreover, we find no evidence that firms which do not cater to societal demand for increased board gender diversity are punished through lower stock returns. Rather, investors seem to value high quality directors, regardless of their gender. This study contributes to the ongoing highly politicized discussion on the effects of female board representation by providing new international evidence.

Keywords: Corporate Governance, Board of Directors, Gender Diversity, Shareholder Value

JEL Classification: G11, G30, G34, J16