Firms’ Motives for Female Director Appointments and the Value Impact of Women's Representation on Boards

47 Pages Posted: 16 Mar 2022

See all articles by Donghua Zhou

Donghua Zhou

Jiangxi University of Finance and Economics

Fei Wu

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF)

Yujie Zhao

Shanghai University

Abstract

Using the degree of a son-preference culture (SPC) in an area as a measure of local firms’ nontokenism motives to appoint female directors, this paper examines how the value impact of women’s representation on boards (WROB) varies across different motives of female director appointments in China. We find that WROB induces better performance for firms operating in strong SPC areas. This effect is much stronger for firms potentially associated with higher SPC–related costs. Female directors in SPC areas add more value by improving firms’ corporate governance and reducing firms’ risk-taking and costs of capital. Our findings suggest that firms’ motives for female director appointments matter in understanding the value creation of female directors.

Keywords: female representation on boards, son-preference culture, firm performance, Chinese non-SOE firms

Suggested Citation

Zhou, Donghua and Wu, Fei and Zhao, Yujie, Firms’ Motives for Female Director Appointments and the Value Impact of Women's Representation on Boards. Available at SSRN: https://ssrn.com/abstract=4059040 or http://dx.doi.org/10.2139/ssrn.4059040

Donghua Zhou (Contact Author)

Jiangxi University of Finance and Economics ( email )

South Lushan Road
Nanchang, Jiangxi 330013
China

Fei Wu

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF) ( email )

Shanghai Jiao Tong University
211 West Huaihai Road
Shanghai, 200030
China

Yujie Zhao

Shanghai University ( email )

149 Yanchang Road
SHANGDA ROAD 99
Shanghai 200072, 200444
China

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