Does Board Gender Diversity Affect The Financial Transparency?a Large Sample Analysis Of Chinese Listed Firms

This paper investigates whether the board gender diversity have a significant impact on the financial transparency in firms for a large sample of Chinese companies. Research on gender and business ethics is not raised up recently:the issue about women and their status in business world and research world has been widely discussed in both demography and organization behavior. However, the concern about the lack of heterogeneity in the composition of board grows up lately with a time length of only a decade. Most of the present investigations about gender diversity in board and its impact on corporate governance and corporate performance tend to be more theoretical than practical. So far, the empirical evidences of the relationship of board gender diversity and corporate governance and performance are confined to the test of relevance of "board gender diversity and governance and performance","board gender diversity and the informativeness of stock price","board gender diversity and earnings quality". But all of these researches are based on the statistics of foreign companies. So this study is the first to examine the relationship between board gender diversity and financial transparency in emerging markets such as China.In this paper, gender diversity is defined as the ratio of female directors to the total number of directors in board of a certain company. Transparency is measured in two ways:an assessment system based on Botosan’s items to evaluate corporate information disclosure level, adjusting according to legislation and rules pertain to information disclosure in China; and the annual report of corporate information disclosure assessment released by SZSE (Shenzhen Stock Exchange). The sample for first way of measuring transparency consists of1996director-level data (1025private enterprise stocks and969state-owned enterprise stocks included) from A-share market of China, and for the second way450data (173private enterprise stocks and275state-owned enterprise stocks included) from A-share motherboard of SZSE. The empirical results do not show a robust positive relation between board gender diversity and corporate financial transparency with full samples and private-owned enterprise stocks samples. This means unlike the documented gender difference in financial transparency in the developed countries, advocating firms to elect more female directors in board may not helpful to increase listed firms’financial transparency. So instead of hiring more female directors, those firms in China may need to seek other ways to improve corporate governance and thus increase their financial transparency. Unlike the private-owned enterprises samples, the relationship between board gender diversity and corporate financial transparency is positive, which suggests the efficiency of State-owned Enterprises Reform and the improvement of the governance of state-owned enterprises.This paper contributes to the literature in several ways. First, this is the first empirical research to examine the relationship between gender diversity in board and corporate financial transparency, which currently receives popularity in both literature and the public media. Second, this study collects different subjects together to substantiate the hypothesis, furthering the communication of various fields.But still, drawbacks beyond control exist to be eliminated with future research going further. First, financial transparency is decided by many inside and outside factors; this study only controls several of them. It is possible that there are some key variables determining the regression results being ignored. So maybe more important factors need to be controlled in the future analysis. Second, one of the possible explanations given in the paper for the inconsistence of the empirical results in developed market and emerging market is the function of female directors being prohibited by certain factors. Although I have tried to find proper measures to substitute those prohibitive elements to make the analysis more convincing, still no proxy has been considered approximate. So it may as well take more effort and time to control those prohibitive factors.