Journal of Corporate Finance Vol. 78 2023
Gender bias, board diversity, and firm value: Evidence from a natural experiment
Abstract
We study the impact of gender diversity in corporate boards on firm value by exploiting a natural experiment setting in India where the government mandated firms to appoint at least one female director on their boards. We find a significantly positive market reaction when firms comply with the mandate but only when they appoint qualified female directors who are not related to promoters. Moreover, market reward is higher for firms headquartered in states with severe gender bias. We show how regulatory intervention mitigates frictions related to gender bias to improve firm value through greater gender diversity when firms respond appropriately.
- DOI
- 10.1016/j.jcorpfin.2022.102349
- Volume
- 78
- Pages
- 102349
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref