Sustainability, Asset Redeployability, and Board Gender Diversity

41 Pages Posted: 6 Jan 2023

See all articles by Thunyanee Pothisarn

Thunyanee Pothisarn

National Institute of Development Administration (NIDA) - NIDA Business School

Pattanaporn Chatjuthamard

Sasin GIBA

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Suwongrat Papangkorn

Thammasat University

Date Written: January 4, 2023

Abstract

In times of crisis, corporate governance, particularly the gender equality aspect, is critically important. Motivated by the phrase ‘gender equality today for a sustainable tomorrow’, we investigate how board gender diversity affects asset redeployability, which is a key element in the literature on investment irreversibility and a predictor of a firm's liquidity, especially in the face of unforeseen events. Asset redeployability is also a crucial feature of sustainability that has received surprisingly little attention in the literature. Based on a novel indicator of asset redeployability developed recently by Kim and Kung (2017), our results suggest that greater board gender diversity leads to greater asset redeployability, implying that female directors value asset redeployability. The findings significantly support the argument that female directors have lower risk tolerance and, as a result, favor asset redeployability, which is less risky due to flexibility of use. Further analyses, such as propensity score matching, an instrumental-variable analysis, and Oster's (2019) approach for assessing coefficient stability, validate the results. Our results suggest that female directors foster sustainability by enhancing asset redeployability.

Keywords: Sustainability, asset redeployability, redeployable assets, board gender diversity, female directors, corporate governance

JEL Classification: M14, G32, G34

Suggested Citation

Pothisarn, Thunyanee and Chatjuthamard, Pattanaporn and Jiraporn, Pornsit and Papangkorn, Suwongrat, Sustainability, Asset Redeployability, and Board Gender Diversity (January 4, 2023). Available at SSRN: https://ssrn.com/abstract=4318161 or http://dx.doi.org/10.2139/ssrn.4318161

Thunyanee Pothisarn

National Institute of Development Administration (NIDA) - NIDA Business School

Pattanaporn Chatjuthamard

Sasin GIBA ( email )

Bangkok
Thailand

Pornsit Jiraporn (Contact Author)

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

Suwongrat Papangkorn

Thammasat University

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