Board Gender Diversity and Firm Value in Times of Crisis: Evidence from the COVID-19 Pandemic

53 Pages Posted: 28 Jun 2021 Last revised: 17 Oct 2022

See all articles by Farida Akhtar

Farida Akhtar

Macquarie University

Don O'Sullivan

affiliation not provided to SSRN

Madhu Veeraraghavan

T.A. PAI Management Institute, Finance Area; T A Pai Management Institute, Manipal

Leon Zolotoy

University of Melbourne - Melbourne Business School

Date Written: October 16, 2022

Abstract

We study the impact of board gender diversity on stock price reactions to the outbreak of the COVID-19 pandemic. We provide robust evidence that stocks of firms with gender-diverse boards experienced higher abnormal returns when the negative market sentiment induced by the outbreak of the COVID-19 pandemic was at its peak. In cross-sectional analysis, we find that the documented effect was amplified among financially constrained firms, firms with a longer cash conversion cycle, and firms with higher information uncertainty, while it was mitigated among firms with higher managerial ability. Supplemental analysis suggests that gender diversity in both advisory and monitoring board committees played a role in shaping the documented relation. Our findings are consistent with the view that the market interpreted board gender diversity as a positive signal regarding firms’ ability to weather the economic implications of the COVID-19 pandemic.

Keywords: Board gender diversity, Abnormal returns, Crisis, COVID-19

JEL Classification: G14, G30, G40

Suggested Citation

Akhtar, Farida and O'Sullivan, Don and Veeraraghavan, Madhu and Zolotoy, Leon, Board Gender Diversity and Firm Value in Times of Crisis: Evidence from the COVID-19 Pandemic (October 16, 2022). Available at SSRN: https://ssrn.com/abstract=3869585 or http://dx.doi.org/10.2139/ssrn.3869585

Farida Akhtar

Macquarie University

North Ryde
Sydney, New South Wales 2109
Australia

Don O'Sullivan

affiliation not provided to SSRN

Madhu Veeraraghavan

T.A. PAI Management Institute, Finance Area ( email )

Bangalore
Manipal, Karnataka 576104
India
+91-820-2701030 (Phone)

T A Pai Management Institute, Manipal ( email )

TAPMI Canpus
Manipal
Manipal, Manipal 576104
India
+91-820-2701020 (Phone)

Leon Zolotoy (Contact Author)

University of Melbourne - Melbourne Business School ( email )

200 Leicester Street
Carlton, Victoria 3053 3186
Australia

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