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

Abstract

We provide robust evidence that stocks of the firms with gender-diverse boards experienced higher abnormal returns during the period when negative market sentiment induced by the outbreak of the COVID-19 pandemic was at its peak. Further, we find that the documented effect was amplified among financially constrained firms, firms with longer cash conversion cycle, and firms with high information uncertainty, while was mitigated among firms led by more effective management teams. Our findings are consistent with the view that 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