Discrimination in the Stock Market: Board Gender and Stock Performance

48 Pages Posted: 19 Sep 2019

See all articles by Anthony Sanford

Anthony Sanford

University of Maryland

Joannie Tremblay-Boire

University of Maryland - School of Public Policy

Date Written: September 11, 2019

Abstract

In this paper, we use event studies to estimate the effects of changes to a public firm's board of trustees on stock returns. The goal is to determine whether the gender of an incoming board member is perceived differently by investors. Scholarly findings on gender and leadership have been mixed at best. Overall, the evidence seems to indicate that women and men in comparable leadership positions are much more alike than different. Yet, the number of women in leadership positions in the United States (and globally) is still disproportionately low-a phenomenon known as the "glass ceiling." Our study shows that women and men, at least in the United States, are still not created equal in the eyes of investors. Using BoardEx data on the composition of U.S. public firm boards for 1992-2017, we find that changes to a firm's board are consistently perceived as a negative information shock by investors, but the effect of incoming female board members is more than twice as negative as than of male counterparts.

Keywords: asset pricing, gender, stock performance, event study, information shocks

JEL Classification: G00, G1, G12, J16, J00

Suggested Citation

Sanford, Anthony and Tremblay-Boire, Joannie, Discrimination in the Stock Market: Board Gender and Stock Performance (September 11, 2019). Available at SSRN: https://ssrn.com/abstract=3367488 or http://dx.doi.org/10.2139/ssrn.3367488

Anthony Sanford (Contact Author)

University of Maryland ( email )

4113AA Van Munching Hall
College Park, MD 20742
United States

HOME PAGE: http://www.terpconnect.umd.edu/~sanfoan/

Joannie Tremblay-Boire

University of Maryland - School of Public Policy ( email )

2101 Van Munching Hall
College Park, MD 20742
United States

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