Impact of board gender diversity on dividend payments: Evidence from some emerging economies

This study investigates the impact of board gender diversity on dividend payments in the context of emerging economies. Using a dataset of listed firms from India, China and Russia over the period 2007–2014, we find strong and robust evidence indicating that board gender diversity is negatively related to cash dividend payments in all emerging economies. Moreover, we find that state-ownership positively moderates the relationship between gender diversity and dividend payments. However, this effect is observed only for China and Russia. In additional analyses, we find that the negative link between board gender diversity and dividend payments is more pronounced during the financial crisis. However, the moderating role of state-ownership does not remain significant during the financial crisis.     

Board generational diversity in emerging markets

To identify the determinants of the generational diversity of board membership in emerging market firms, we conducted an empirical analysis using state-level social inequality indices and data on 14,598 listed/unlisted firms from 20 Eastern European countries and China. We found that, in these emerging markets, social inequality strongly inhibits the generational diversity of board membership, regardless of the gender of board members. The results also reveal that four firm attributes—board size, CEO duality, state ownership, and the presence of foreign investors from non-advanced economies as firm owners—significantly affect the age composition of board directors in line with our expectations. Two other firm attributes—ownership concentration and firm ownership by foreign investors from advanced economies—are also found to have a significant impact on board generational diversity; however, the direction of their impact contradicts our predictions. Supplementary estimations carried out by introducing various sample restrictions produce similar results, thus confirming the statistical robustness of our findings.     

Women on board and performance of family firms: Evidence from India

This paper provides empirical evidence on the effect of woman directors on performance of family firms in the context of an emerging economy. Using data from India covering periods prior to and post institution of gender quotas, we find evidence that the presence of woman directors on board leads to higher firm performance. However, this positive effect is driven by independent woman directors. Further this effect gets attenuated when family members occupy key management positions in the firm. We conclude that governance structures of firms in emerging economies matter for the impact of woman directors on firm performance.     

Firm performance and boardroom gender diversity: A quantile regression approach

We investigate the relation between firm performance and boardroom gender diversity using quantile regression methods. Using annual data on over 3000 US firms from 2007 to 2014, we show that the presence of women on the board has a positive effect on firm performance, and this effect varies at different parts of the performance distribution. Critically, we demonstrate that the presence of women directors alters the dispersion of firm performance. Our quantile regression results suggest that female directors have a significantly larger positive impact in high-performing firms relative to low-performing firms. The board gender diversity effect is not homogeneous as assumed in previous research. In addition, we account for the endogenous selection of women to the board. Using instrumental variable quantile regression, we find that in general there is a positive correlation between firm performance and board gender diversity. Overall, we suggest that boardroom gender diversity has an effect on both the conditional mean and the dispersion of firm performance, and quantile regression adds value to the empirical examination of the performance impact of board gender diversity.     

Does Board Gender Diversity Have a Financial Impact? Evidence Using Stock Portfolio Performance

There is growing regulatory pressure on firms worldwide to address the under-representation of women in senior positions. Regulators have taken a variety of approaches to the issue. We investigate a jurisdiction that has issued recommendations and disclosure requirements, rather than implementing quotas. Much of the rhetoric surrounding gender diversity centres on whether diversity has a financial impact. In this paper we take an aggregate (market-level) approach and compare the performance of portfolios of firms with gender diverse boards to those without. We also investigate whether having multiple women on the board is linked to performance, and if there is a within-industry effect. Overall, we do not find evidence of an association between diversity and performance. We find some weak evidence of a negative correlation between having multiple women on the board and performance, but that in some industries diversity is positively correlated with performance.     

Board diversity and firm performance: The role of business group affiliation

There is little consensus globally on the relationship between board diversity and firm performance. Using the resource dependence and agency views, this paper examines how business group affiliation influences the relationship between board diversity and firm performance as a contextual/confounding factor. Based on data for listed firms in India, we find that board demographic diversity is positively associated with the firm performance (Tobin’s Q) of standalone firms, but this association is negative for group-affiliated firms. This negative effect of group affiliation is confirmed in a test based on a novel measure of firm performance using the stock market reaction to the announcement of mergers and acquisitions. For both measures of performance, we show that business group affiliation impairs the positive firm value effects of board demographic diversity. These findings imply that the relationship between board diversity and firm performance requires re-examination in the many countries where group affiliation is common. Our results also provide evidence of a new cost of group affiliation and show in a fresh context that cross-country studies should account for international variations in ownership and institutional structures.     

Board gender diversity and firm performance: The moderating role of firm size

This paper investigates the relationships among board gender diversity, firm performance, and firm size. Our paper provides new insights into the relationship between board gender diversity and firm performance by examining whether firm size alters the impact of board gender diversity on firm performance. We use a panel data from A-share-listed non-financial firms in China to examine the relationship during the period of 2007–2012. Our finding demonstrates that the gender diversity on the board has a positive impact on firm performance if and only if the value of firm size is less than some critical value. In addition, we also find that firm size may undermine the positive impact of board gender diversity on firm performance. This paper contributes to the literature by offering a contingency approach to examine the relationship between board gender diversity and firm performance as well as shedding light on the relationship in the context of a developing economy.     

The Signaling Effect of Corporate Social Responsibility in Emerging Economies

What signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility (CSR) practices? We argue that in emerging economies, firms that adopt CSR practices positively signal investors that their firms have superior capabilities for filling institutional voids. From an institution-based view, we hypothesize that the institutional environment moderates the signaling effect of CSR on a firm’s financial performance. Based on a sample of firms from ten Asian emerging economies, we find a positive relationship between CSR practices and financial performance. This positive relationship is stronger in the less developed capital market than in the more developed one. The financial benefits of CSR practices are also more salient in the low information diffusion market than in the high one. We emphasize that signaling theory and the institution-based view can jointly contribute to the CSR literature.     

Does gender diversity on corporate boards increase risk‐taking?

We study the impact of board gender diversity on firm risk‐taking in a developing market. Our study is drawn from a sample of 30 Tunisian‐listed firms between 1997 and 2010. First, we found that women have a risk perception that leads to risk avoidance behaviour: the presence of women directors, even when there is one woman director, is positively associated with cash ratio. Second, we showed no significant relationship between board gender diversity and the propensity to take strategic or financial risk‐taking. Third, the presence of state officer/bureaucrats and/or politically connected women have a positive effect on cash holding and investment opportunities. Finally, we found that foreign investors do not invest in firms with gender‐diverse boards. We conclude with a discussion of contributions to scholarship and practice, and present avenues for future research. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Corporate social responsibility in emerging economies: Investigating firm behavior in the Indian context

Scholars have questioned the appropriateness of using a western‐centric framework to investigate corporate social responsibility (CSR) in emerging economies. This study assesses the appropriateness of using such a framework in one emerging economy—India. More specifically, the drivers of CSR and their impact on firm‐level CSR activity in the Indian context are investigated and compared with those in developed economies. Content analysis of 369 CSR policy statements of publicly traded Indian firms revealed the factors that drive CSR activities of Indian firms are similar to those found in developed economies. However, the ways firms respond to the drivers of CSR are surprisingly different in the Indian context, and these differences can be traced to attributes of the Indian socio‐cultural context. Implications and recommendations for future research conducted in India, and in other emerging economies, are offered.     

Stock liquidity during COVID-19 crisis: A cross-country analysis of developed and emerging economies,and economic policy uncertainty

We investigate the impact of the COVID-19 on firms' stock liquidity across six developed and emerging economies. Unlike prior literature, we further compare the effects of the pandemic between developed and emerging economies, high and low economic policy uncertainty (EPU), and large and small firms. Our results document the significant negative impact of infection cases and deaths on firms' stock liquidity across the sample countries, and the similar effect of their interaction term. We find that the impact is more pronounced in the developed economies, high EPU and small firms, compared to emerging economies, low EPU and large firms, respectively.     

Erratum to: Corporate Socially Responsible Initiatives and Their Effects on Consumption of Green Products

This study extends previous literature on the association between Confucianism and corporate decisions by examining Confucianism’s influence on board gender diversity. Using a sample of Chinese listed firms during the period of 2001–2011 and geographic-proximity-based Confucianism variables, I provide strong and consistent evidence to show that Confucianism is significantly negatively associated with board gender diversity, suggesting that the proportion of women directors in the boardroom is significantly lower for firms surrounded by strong Confucianism atmosphere than for firms located in regions with weak Confucianism atmosphere. This finding also implies that Confucian philosophical system has important impacts on business ethics and women’s status in corporate governance. Moreover, GDP per capita, the proxy for economic development level in a province in which a firm is located, attenuates the negative association between Confucianism and board gender diversity. Above results are robust to different measures of Confucianism and board gender diversity and are still valid after controlling for the potential endogeneity between Confucianism and board gender diversity.     

Media visibility and board gender diversity

Despite the efforts of governments and market regulators, the under-representation of women on corporate boards continues to be a global concern. In this context, this study extends prior literature by investigating the relationship between media visibility and gender diversity on boards of directors. We examine a sample of 101 Spanish nonfinancial listed firms over the period 2003–2016. We find that media visibility positively affects board gender diversity. This finding is robust to alternative measures of media visibility and different econometric specifications. This research contributes to the existing literature on the relationship between media and board composition by suggesting the role of the media as a driver of board gender diversity. Results support the notion that the media are able to discipline managers and dominant owners by inflicting reputational costs.     

The financial determinants of corporate cash holdings: Evidence from some emerging markets

This paper investigates corporate cash holdings in developing countries. In particular, we look into the effect of capital structure and dividend policy on cash holdings in Brazil, Russia, India, and China and compare our results with a control sample from the US and the UK. Our sample contains 1992 firms across these countries for the period 2002–2008. We employ Instrumental Variables analysis to control for the endogeneity of the financial policies (cash holdings, capital structure, and dividend policy). Our results show some evidence that capital structure and dividend policy affect cash holdings. There are similarities between developed and developing countries on the factors determining corporate cash holdings. The results of our cross-country model provide evidence that capital structure, dividend policy, and firm size are important factors in determining cash holdings. Finally, we show that firms operating in countries with low shareholder protection hold more cash.     

European Green Mutual Fund Performance: A Comparative Analysis with their Conventional and Black Peers

In recent years, several countries have enacted guidelines and/or mandatory laws to increase the presence of women on the boards of companies. Through these regulatory interventions, the aim is to eradicate the social and labor grievances that women have traditionally experienced and which has relegated them to smaller-scale jobs. Nevertheless, and despite the advances achieved, the female representation in the boardroom remains far from the desired levels. In this context, it is now necessary to enhance the advantages of board gender diversity from both ethical and economic points of view. This article examines the relation between board gender diversity and economic results in Spain: the second country in the world to legally require gender quotas in boardrooms and historically characterized by a minimal female participation in the workforce. Based on a sample of 125 non-financial firms listed on the Madrid Stock Exchange from 2005 to 2009, our findings show that in the period analyzed the increase of the number of women on boards was over 98 %. This suggests that compulsory legislation offers an efficient framework to execute the recommendation of Spanish codes of good governance by means of the increase in the number of women in the boards of firms. Furthermore, we find that the increase in the number of women on the boards is positively related to higher economic results. Therefore, both results suggest that gender diversity in boardrooms should be incremented, mandatory laws being a key factor to do so.     

An ambidextrous learning model for the internationalization of firms from emerging economies

Emerging economies are playing an increasingly important role in the global economy. The rising phenomenon of the internationalization process of firms in emerging economies, or emerging market firms, particularly their capacity to increase their presence in the markets of developed economies, has been insufficiently studied. Because of the unique characteristics of emerging economies, some assumptions of traditional international models are irrelevant. This paper provides a theoretical framework that explains the importance of different types of knowledge and the relationships between them in the internationalization process. We delineate an ambidextrous learning strategy that is contingent on different levels of firm competitiveness.     

Gender attitudes and the effect of board gender diversity on corporate environmental responsibility

We investigate how societal attitudes toward gender moderate the positive effect that gender diversity of a firm's board of governors has on its corporate environmental responsibility (CER). Using a sample of Chinese listed firms, we show that board gender diversity improves CER, particularly when female board members hold positions of authority. However, the positive influence of female board members is attenuated in provinces that have higher male-to-female sex at birth ratios. This finding suggests that gender diversity enhances board effectiveness on CER, and the societal prevalence of gender discrimination hinders the status of women in corporate governance.     

Lost in translation? Corporate governance,independent boards and blockholder appropriation

Emerging economies are oftentimes characterized by state capitalism, concentrated ownership and constrained resources, where firms face underinvestment due to resource misappropriation. The adoption of Anglo-American corporate governance practices may result in sub-optimal outcomes. We draw on the multiple agency perspective and research on cross-national governance to examine how independent directors, as agents with multiple roles, might mitigate blockholder appropriation. Using unique panel data from Russian publicly traded firms where the government and the business elite are predominant blockholders, we find that independent directors in private firms are less effective in mitigating blockholder appropriation than in state-owned enterprises. We further investigate board independence effects driven by the exposure to three international governance boundary conditions, namely Russian Multinational Enterprises, foreign listings of Russian firms, and foreign independent directors on Russian boards. Our study focuses on the agents that might assuage principal-principal conflicts, explores when ineffective governance can be minimized, and contributes to research on how governance practices developed in advanced economies get translated in emerging market economies.     

Gender Diversity in the Boardroom and Firm Financial Performance

The monitoring role performed by the board of directors is an important corporate governance control mechanism, especially in countries where external mechanisms are less well developed. The gender composition of the board can affect the quality of this monitoring role and thus the financial performance of the firm. This is part of the “business case” for female participation on boards, though arguments may also be framed in terms of ethical considerations. While the issue of board gender diversity has attracted growing research interest in recent years, most empirical results are based on U.S. data. This article adds to a growing number of non-U.S. studies by investigating the link between the gender diversity of the board and firm financial performance in Spain, a country which historically has had minimal female participation in the workforce, but which has now introduced legislation to improve equality of opportunities. We investigate the topic using panel data analysis and find that gender diversity – as measured by the percentage of women on the board and by the Blau and Shannon indices – has a positive effect on firm value and that the opposite causal relationship is not significant. Our study suggests that investors in Spain do not penalise firms which increase their female board membership and that greater gender diversity may generate economic gains.     

Business Group Affiliation and Corporate Sustainability Strategies of Firms: An Investigation of Firms in India

In spite of an overwhelming importance of business groups (BG) in the economic development of many countries, systematic inquiry on how the BGs and their affiliated firms approach and contribute to shared value creation and sustainable development is rare. In this paper we address this research gap by investigating two related questions—do BG-affiliated firms differ from non-BG firms in their corporate sustainability strategy (CSS) and how does BG affiliation influence the relationship between stock of fungible resources and CSS of firms? Drawing from the BG literature we theorize that BG-affiliated firms tend to adopt of both environmental and social sustainability strategies more than non-BG firms. We also argue that although according to resource-based view, the stock of fungible resources of firms positively influences CSS, BG affiliation negatively moderates the relationship between stock of fungible resources and CSS of firms. Stock of fungible resources matters less for BG-affiliated firms in undertaking CSS as they have access to resources of the BG network. We test our theoretical predictions using a proprietary data set of 163 Indian publicly listed firms, out of which 76 are BG-affiliated firms belonging to 74 BGs. The data for corporate environmental and social sustainability strategies have been obtained by administering a survey instrument among the top level executives of the participating firms. We find support for our theoretical predictions that signify that BGs and their affiliates make important contributions to shared value creation and sustainable development in emerging economies like India.