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

79 Pages Posted: 5 Mar 2018 Last revised: 25 Nov 2018

See all articles by Thomas R. Loy

Thomas R. Loy

University of Bayreuth - Business Administration

Hendrik Rupertus

University of Bayreuth - Business Administration

Date Written: November 22, 2018

Abstract

We analyze investors’ perception and long-term effects of board gender diversity on firms’ capital market performance in an international setting. Our results, controlling for the endogenous nature of board appointments, indicate that female board representation neither improves nor reduces firms’ long-term stock performance. Thus, investors seem to perceive female and male board members as being equivalent in the long term and, on average, do not base their investment decisions on directors’ gender. Hence, we argue that it is imperative to go beyond the conventional thinking in terms of the business case for gender diversity and broaden the perspective also in order to incorporate societal and ethical aspects in the strive to board gender equality. Even more so, as our results show that it does not entail reduced shareholder value, which the literature on mandatory gender quotas commonly seems to suggest.

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

JEL Classification: G11, G30, G34, J16

Suggested Citation

Loy, Thomas R. and Rupertus, Hendrik, Board Gender Diversity and its Effects on Capital Markets: New International Evidence (November 22, 2018). Available at SSRN: https://ssrn.com/abstract=3128914 or http://dx.doi.org/10.2139/ssrn.3128914

Thomas R. Loy (Contact Author)

University of Bayreuth - Business Administration ( email )

Universitätsstr. 30
Bayreuth, 95447
Germany

HOME PAGE: http://www.wp.uni-bayreuth.de

Hendrik Rupertus

University of Bayreuth - Business Administration ( email )

Universitätsstraße 30
Bayreuth, 95444
Germany

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