Board Gender Diversity and Investment Efficiency: Global Evidence from 83 Country-Level Interventions

The Accounting Review, in-press.

56 Pages Posted: 4 May 2024

See all articles by Dave (Young II) Baik

Dave (Young II) Baik

Nanyang Technological University (NTU) - Division of Accounting

Clara Xiaoling Chen

University of Illinois at Urbana-Champaign - Department of Accountancy

David Godsell

University of Illinois at Urbana-Champaign

Date Written: December 5, 2023

Abstract

We investigate the effect of board gender diversity (BGD) on investment outcomes. We identify variation in BGD by compiling, for the first time, a global catalog of 83 BGD interventions implemented in 59 countries between 1999 and 2021. Using a staggered difference-in-differences research design, we document that BGD interventions improve investment outcomes. We find that treated firms reduce inefficient investment by 0.6 percent of total assets or 6.5 percent of total investment and are 4 percentage points more likely to have above-median investment efficiency. Cross-sectional tests reveal more pronounced results when BGD interventions are mandatory, are strongly enforced, and result in larger BGD increases. Event-time, stacked panel, and a wide variety of endogeneity-mitigating robustness tests corroborate. Our plausibly causal inferences have important implications for both research and practice.

Keywords: board gender diversity, investment, corporate governance

JEL Classification: F52, G34, G38, K22, M41, K38.

Suggested Citation

Baik, Dave (Young II) and Chen, Clara Xiaoling and Godsell, David, Board Gender Diversity and Investment Efficiency: Global Evidence from 83 Country-Level Interventions (December 5, 2023). The Accounting Review, in-press. , Available at SSRN: https://ssrn.com/abstract=4798242

Dave (Young II) Baik

Nanyang Technological University (NTU) - Division of Accounting ( email )

Nanyang Business School
Singapore, 639798
Singapore

Clara Xiaoling Chen

University of Illinois at Urbana-Champaign - Department of Accountancy ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

David Godsell (Contact Author)

University of Illinois at Urbana-Champaign ( email )

Champaign, IL 61820
United States
1.217.300.0844 (Phone)

HOME PAGE: http://giesbusiness.illinois.edu/profile/david-godsell

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