Women Director Interlocks and Firm Performance Evidence from India

42 Pages Posted: 5 Dec 2023

See all articles by Shreya Biswas

Shreya Biswas

Birla Institute of Technology and Science (BITS), Hyderabad Campus

Jayati Sarkar

Indira Gandhi Institute of Development Research (IGIDR)

Ekta Selarka

Madras School of Economics

Abstract

This paper empirically examines the impact of network ties of women directors on firm value and sheds light on the unaddressed issue of whether such ties can serve as one of the channels through which women on board affect firm performance. In doing so, the study also seeks to provide a gendered perspective of the performance effects of interlocking directorates on which empirical evidence is scant. Using a panel of listed firms in India for the period 2010-2020 covering periods of pre and post institution of gender quota on company boards, our study finds that women director connectedness, as captured in select network centrality measures, has a positive and robust effect on firm value. We further find evidence that the positive relationship with firm value is driven by the information advantage and influence of women director networks. Finally, based on a director level analysis, we find that more connected women directors, including those who are independent, contribute to corporate governance through higher meeting attendance, and through their memberships in important committees. The findings of the paper highlight the unique role of women director interlocks in firm governance and performance.

Keywords: Interlocking directors, Firm value, Woman Directors, Network centrality, India, Emerging Markets

Suggested Citation

Biswas, Shreya and Sarkar, Jayati and Selarka, Ekta, Women Director Interlocks and Firm Performance Evidence from India. Available at SSRN: https://ssrn.com/abstract=4653412 or http://dx.doi.org/10.2139/ssrn.4653412

Shreya Biswas

Birla Institute of Technology and Science (BITS), Hyderabad Campus ( email )

Block C234, BITS-Pilani, Hyderabad Campus
Jawahar Nagar, Shameerpet Mandal
Hyderabad, Telangana 500078
India

Jayati Sarkar

Indira Gandhi Institute of Development Research (IGIDR) ( email )

Gen A.K. Vaidya Marg Santoshnagar
Goregaon (East)
Bombay 400065, Maharashtra
India
91-22-8400919 (Phone)
91-22-8402752 (Fax)

Ekta Selarka (Contact Author)

Madras School of Economics ( email )

Gandhi Mandapam Road
Behind Government Data Center, Kottur
Chennai, 600025
India

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