Does board gender diversity matter? Evidence from hostile takeover vulnerability

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pattanaporn Chatjuthamard ◽  
Pornsit Jiraporn ◽  
Sang Mook Lee ◽  
Ali Uyar ◽  
Merve Kilic
Keyword(s):  
Causal Effect ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Dynamic Panel Data ◽  
Governance Mechanism ◽  
State Legislation ◽  
Content Type ◽  
Board Gender Diversity ◽  
Takeover Market

Purpose Theory suggests that the market for corporate control, which constitutes an important external governance mechanism, may substitute for internal governance. Consistent with this notion, using a novel measure of takeover vulnerability primarily based on state legislation, this paper aims to investigate the effect of the takeover market on board characteristics with special emphasis on board gender diversity. Design/methodology/approach This paper exploits a novel measure of takeover vulnerability based on state legislation. This novel measure is likely exogenous as the legislation was imposed from outside the firm. By using an exogenous measure, the analysis is less vulnerable to endogeneity and is thus more likely to show a causal effect. Findings The results show that a more active takeover market leads to lower board gender diversity. Specifically, a rise in takeover vulnerability by one standard deviation results in a decline in board gender diversity by 10.01%. Moreover, stronger takeover market susceptibility also brings about larger board size and less board independence, corroborating the substitution effect. Additional analysis confirms the results, including propensity score matching, generalized method of moments dynamic panel data analysis and instrumental variable analysis. Originality/value The study is the first to explore the effect of the takeover market on board gender diversity. Unlike most of the previous research in this area, which suffers from endogeneity, this paper uses a novel measure of takeover vulnerability that is probably exogenous. The results are thus much more likely to demonstrate causality.

The influence of board social capital on corporate social responsibility reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nuria Reguera-Alvarado ◽  
Francisco Bravo-Urquiza
Keyword(s):  
Social Capital ◽  
Resource Dependence ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Dynamic Panel Data ◽  
Content Type ◽  
Csr Reporting ◽  
Multiple Directorships ◽  
The Impact ◽  
Board Social Capital

PurposeThe main objective of this paper is to analyze the influence of multiple directorships, as a critical component of board social capital, on CSR reporting. This study also explores the moderating effect of certain board attributes on multiple directorships.Design/methodology/approachThe authors’ sample is composed of Spanish listed firms in the Madrid Stock Exchange for the period 2011–2017. A dynamic panel data model based on the Generalized Method of Moments (GMMs) is employed.FindingsRelying on a resource dependence view, the authors’ results highlight an ambiguously positive association between multiple directorships and the level of CSR reporting. In particular, this relationship is positively moderated by both board size and gender diversity.Research limitations/implicationsThese findings contribute to academic debates concerning the value of board members intellectual capital. In particular, the authors emphasize the importance of board social capital, as well as the need to consider the context in which directors make decisions.Practical implicationsThis evidence may prove helpful to firms when configuring the board of directors, and for regulators and professionals when refining their legislations and recommendations.Originality/valueTo the best of the authors' knowledge, this is the first study that empirically analyzes the impact of an important element of board social capital, such as multiple directorships, on CSR reporting, which has become crucial in financial markets.

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

Do women on corporate boardrooms influence remuneration patterns and socially responsible practices? Malaysian evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sitara Karim
Keyword(s):  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Executive Directors ◽  
Women Directors ◽  
Socially Responsible ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Board Gender Diversity ◽  
The Relationship ◽  
Practical Implications

PurposeThe prime objective of this study is to investigate the moderating influence of executive and independent female directors on the relationship between remuneration packages (CEO and executive director) and socially responsible practices (marketplace, environment, community, workplace and money spent on CSR) of 483 Malaysian listed firms during 2006–2017.Design/methodology/approachThe dynamic estimator, namely, system generalized method of moments (GMM) given by Blundell and Bond (1998) has been employed on the dataset to control dynamic endogeneity, unobserved heterogeneity and simultaneity problems.FindingsFindings indicate that there is a significant relationship between remuneration patterns of CEOs and executive directors and socially responsible activities. In the same way, executive board gender diversity significantly, whereas independent board gender diversity insignificantly moderates the remuneration and CSR nexus.Practical implicationsThis study is particularly significant for regulatory bodies of Malaysia, e.g. Securities Commission Malaysia, Bursa Malaysia, policy makers, investors and managers. For academia, this study fetches support from agency theory, stakeholder theory and upper echelons theory and presents integrated theoretical approach to be considered for future research.Originality/valueThis paper is unique in providing empirical evidence on the moderating effect of both executive and independent women directors on the relationship between remuneration patterns of CEOs and executive directors and independent CSR activities for the first time. Moreover, this study has sourced several theoretical and practical implications. And, the study employs dynamic estimator for precise and concrete results.

scholarly journals Corporate board structures and intellectual capital: evidence from banks in Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nicholas Asare ◽  
Francis Aboagye-Otchere ◽  
Joseph Mensah Onumah
Keyword(s):  
Intellectual Capital ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Negative Relationship ◽  
Value Added ◽  
Board Independence ◽  
Annual Data ◽  
Board Size ◽  
Content Type ◽  
Board Gender Diversity

PurposeThis study examines the nature of the relationship between board structures (BSs) and intellectual capital (IC) of banks in Africa.Design/methodology/approachUsing annual data from financial statements of 366 banks from 26 African countries from 2007 to 2015, the study estimates IC using the value-added intellectual coefficient (VAIC) and BSs using board size, board independence and board gender diversity. The system generalized method of moments and panel-corrected standard error estimation strategies are used to estimate panel regressions.FindingsThere is a significant negative relationship between board independence and intellectual capital. The results also indicate that the IC of banks does not depend on board size and board gender diversity.Practical implicationsThe study's findings provide evidence of the extent to which BSs have been instituted to support investments in intellectual capital as a means of improving the performance of banks in Africa.Originality/valueThis study provides some empirical evidence from Africa's banking sector to justify that banks with better IC have boards that are less independent. This study is one of the few studies that employs many countries' data.

The impact of labor market freedom on state-level in-migration in the US

2019 ◽  
Vol 9 (1) ◽  
pp. 40-52
Author(s):  
Richard J. Cebula ◽  
Christopher M. Duquette ◽  
G. Jason Jolley
Keyword(s):  
Labor Market ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
State Level ◽  
Dynamic Panel Data ◽  
Content Type ◽  
The Great Recession ◽  
Percentage Point Increase ◽  
The Us ◽  
The Impact

Purpose Influences on the pattern of internal migration in the US, including economic factors, quality-of-life factors and public policy variables have been extensively studied by regional scientists since the early 1970s. Interestingly, a small number of studies also address the effects of economic freedom on migration. The purpose of this paper is to add to the migration literature by examining the impact of labor market freedom on both gross and net state in-migration over the study period 2008–2016. Design/methodology/approach This study uses dynamic panel data analysis to investigate the impact of labor market freedom on both gross and net state in-migration over the study period 2008–2016. Findings The panel generalized method of moments analysis reveals that overall labor market freedom exercised a positive and statistically significant impact on both measures of state in-migration over the study period. The study finds a 1 percentage point increase in the overall labor market freedom index results in a 2.8 percent increase in the gross in-migration rate. Research limitations/implications The findings imply states interested in attracting migrants and stimulating economic growth should pursue policies consistent with increased labor freedom. Originality/value The emphasis in the present study is on the impact of labor market freedom on state-level in-migration patterns, both gross and net, over a contemporary time period that includes both the Great Recession and subsequent recovering.

Gender diversity in the Italian boardroom and firm financial performance

2017 ◽  
Vol 40 (1) ◽  
pp. 75-94 ◽  
Author(s):  
Niccolò Gordini ◽  
Elisa Rancati
Keyword(s):  
Financial Performance ◽  
Boards Of Directors ◽  
Panel Data Analysis ◽  
Gender Diversity ◽  
Gender Quotas ◽  
Content Type ◽  
Law System ◽  
Firm Financial Performance ◽  
Board Gender Diversity ◽  
The Right

Purpose This study aims to analyse the relationship between board gender diversity and firm financial performance in Italy, where the recently enforced Law 120/2011 prescribes gender quotas for boards of directors. Design/methodology/approach Panel data analysis was used to examine the gender diversity–firm financial performance relationship in an unbalanced panel of 918 Italian listed companies during the years 2011-2014. Findings Gender diversity, as measured by the percentage of women on a board and by the Blau and the Shannon indices, has a positive and significant effect on Tobin’s Q, while the presence of one or more women on the board per se has an insignificant effect on firm financial performance. Practical implications The results suggest that board gender diversity is not a simple “numbers game”, greater gender diversity may generate economic gains, greater gender diversity does not destroy shareholder value, investors do not penalize companies that increase female representation on their boards and Italian companies should focus their efforts on the right mix of men and women rather than on simply the presence of at least one woman on a board of directors. Originality/value Most articles on this topic use data from countries with a legal system based on common law; this paper analyses Italy, a country with a civil law system. This is almost certainly the first study to examine the effect of board gender diversity on firm financial performance in the Italian market.

Board gender diversity and environmental, social and corporate governance performance: evidence from ASEAN banks

2020 ◽  
Vol 12 (3/4) ◽  
pp. 269-281 ◽  
Author(s):  
Hamdan Amer Al-Jaifi
Keyword(s):  
Corporate Governance ◽  
Social Performance ◽  
Random Effect ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Board Diversity ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study examines the associations between board gender diversity and banks' environmental, social and corporate governance performance in the ASEAN context.Design/methodology/approachThe study uses a sample of yearly observations for ASEAN banks over the period 2011–2016. Generalized method of moments (GMM) regression is used for the main models, and the findings are supported by other robustness tests, namely ordinary least squares (OLS) regression and panel models (fixed and random effect regression).FindingsThe findings imply that board gender diversity positively influences corporate governance performance, although it has no impact on the banks' environmental and social performance.Research limitations/implicationsThis study offers insights to regulators, investors and bank managers concerning board diversity and its impact on environmental, social and corporate governance performance. The findings imply that having a specific percentage of female directors on the board positively influences corporate governance performance. However, the impact of gender diversity on environmental and social performance is not supported.Originality/valueFew empirical studies have examined the impact of gender diversity on non-financial performance. This study contributes to the debate on the importance of gender diversity by providing empirical evidence for the impact of board gender diversity on three non-performance measures (environmental, social and corporate governance) for ASEAN banks, a topic not previously examined. There is scant attention to it in ASEAN countries, which have unique characteristics, and there remains a gap in the literature regarding the impact of board diversity among banks in this region. The findings of the study are confirmed by several robustness tests.

Board gender diversity and firms’ equity risk

2017 ◽  
Vol 36 (7) ◽  
pp. 590-606 ◽  
Author(s):  
Mohammad Issam Jizi ◽  
Rabih Nehme
Keyword(s):  
Empirical Evidence ◽  
Stock Return ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Return Volatility ◽  
Corporate Boards ◽  
Content Type ◽  
Stock Return Volatility ◽  
Women's Participation ◽  
Board Gender Diversity

Purpose There is a growing attention toward the importance of women’s participation on corporate boards in enhancing board governance and decision-making quality. The literature lacks sufficient empirical evidence on the relationship between women’s involvement on boards and firms’ risk. The purpose of this paper is to investigate the influence of board gender diversity on firms’ risk. Design/methodology/approach This paper explores the influence of women’s participation on corporate boards on firms’ stock return volatility. The examined firms are all non-financial firms listed on the FTSE 350 index between 2008 and 2013. The Bloomberg database is used to collect the needed variables. Panel data are employed through a regression model to estimate relationships. One-step Arellano and Bond and the generalized method of moments are used to control for reverse causality and the existence of endogenous variables. Findings The results suggest that women’s participation on corporate boards favorably impacts firms’ risk by reducing firms’ stock return volatility. The authors also find that the influence of women on reducing stock return volatility is higher in four particular industries recognized by their close proximity to consumers (consumer goods, consumer services, health care, and utilities). Originality/value The study contributes to the growing literature on women on boards and offers solid empirical evidence of the correlation between board gender diversity and firms’ risk. The empirical results provide economical and statistical validity to the “voluntary business-led” approach of Davies reports and to the recommendation by the UK Corporate Governance Code 2014 on the favorable influence of board gender diversity for effective functioning.

Corporate governance practices and capital structure decisions: the moderating effect of gender diversity

2020 ◽  
Vol 20 (5) ◽  
pp. 939-964
Author(s):  
Mohammad A.A Zaid ◽  
Man Wang ◽  
Sara T.F. Abuhijleh ◽  
Ayman Issa ◽  
Mohammed W.A. Saleh ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Capital Structure ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Business Environment ◽  
Board Structure ◽  
Content Type ◽  
Financing Decisions ◽  
The Impact

Purpose Motivated by the agency theory, this study aims to empirically examine the nexus between board attributes and a firm’s financing decisions of non-financial listed firms in Palestine and how the previous relationship is moderated and shaped by the level of gender diversity. Design/methodology/approach Multiple regression analysis on a panel data was used. Further, we applied three different approaches of static panel data “pooled OLS, fixed effect and random effect.” Fixed-effects estimator was selected as the optimal and most appropriate model. In addition, to control for the potential endogeneity problem and to profoundly analyze the study data, the authors perform the one-step system generalized method of moments (GMM) estimator. Dynamic panel GMM specification was superior in generating robust findings. Findings The findings clearly unveil that all explanatory variables in the study model have a significant influence on the firm’s financing decisions. Moreover, the results report that the impact of board size and board independence are more positive under conditions of a high level of gender diversity, whereas the influence of CEO duality on the firm’s leverage level turned from negative to positive. In a nutshell, gender diversity moderates the effect of board structure on a firm’s financing decisions. Research limitations/implications This study was restricted to one institutional context (Palestine); therefore, the results reflect the attributes of the Palestinian business environment. In this vein, it is possible to generate different findings in other countries, particularly in developed markets. Practical implications The findings of this study can draw responsible parties and policymakers’ attention in developing countries to introduce and contextualize new mechanisms that can lead to better monitoring process and help firms in attracting better resources and establishing an optimal capital structure. For instance, entities should mandate a minimum quota for the proportion of women incorporation in boardrooms. Originality/value This study provides empirical evidence on the moderating role of gender diversity on the effect of board structure on firm’s financing decisions, something that was predominantly neglected by the earlier studies and has not yet examined by ancestors. Thereby, to protrude nuanced understanding of this novel and unprecedented idea, this study thoroughly bridges this research gap and contributes practically and theoretically to the existing corporate governance–capital structure literature.

Merton-type default risk and financial performance: the dynamic panel moderation of firm size

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Mushafiq ◽  
Syed Ahmad Sami ◽  
Muhammad Khalid Sohail ◽  
Muzammal Ilyas Sindhu
Keyword(s):  
Financial Performance ◽  
Firm Size ◽  
Default Risk ◽  
Banking Sector ◽  
Generalized Method Of Moments ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Content Type ◽  
Nonfinancial Firms ◽  
The Relationship

PurposeThe main purpose of this study is to evaluate the probability of default and examine the relationship between default risk and financial performance, with dynamic panel moderation of firm size.Design/methodology/approachThis study utilizes a total of 1,500 firm-year observations from 2013 to 2018 using dynamic panel data approach of generalized method of moments to test the relationship between default risk and financial performance with the moderation effect of the firm size.FindingsThis study establishes the findings that default risk significantly impacts the financial performance. The relationship between distance-to-default (DD) and financial performance is positive, which means the relationship of the independent and dependent variable is inverse. Moreover, this study finds that the firm size is a significant positive moderator between DD and financial performance.Practical implicationsThis study provides new and useful insight into the literature on the relationship between default risk and financial performance. The results of this study provide investors and businesses related to nonfinancial firms in the Pakistan Stock Exchange (PSX) with significant default risk's impact on performance. This study finds, on average, the default probability in KSE ALL indexed companies is 6.12%.Originality/valueThe evidence of the default risk and financial performance on samples of nonfinancial firms has been minimal; mainly, it has been limited to the banking sector. Moreover, the existing studies have only catered the direct effect of only. This study fills that gap and evaluates this relationship in nonfinancial firms. This study also helps in the evaluation of Merton model's performance in the nonfinancial firms.

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