An Empirical Study On The Effects Of Female Executives On Firm Performance

The phenomenon of female executives widespread all over the world attracts the general concern of Western scholars, while scholars of Chinese pay less attention on this subject. In China, due to the impact of the traditional culture of Confucian, the role of women in economic development always been neglected by folk. In recent years, there are more and more women to participate in economic activities, who break the glass ceiling limit and became the company’s senior management. However, what’s the real purpose of the company which one employs higher rate of female executives in the top management team? Is it the consideration of their own development demand to hire more female executives or just to meet the requirements of other stakeholders to achieve the gender diversity on management staff?This paper applies the style of leadership theory and agency theory to analyze the advantages female executives on the top management, using empirical evidence on the relationship between female executives and enterprise performance. Secondly, this paper set up a model to testify that whether the human capital and social capital strengthen the role of female on corporate performance or not. Empirical evidence supports that human capital and social capital affect the relationship between female executives and corporate performance, and this effect will vary with the nature of business changes accordingly. Finally, this paper studies the1001listed companies which are listed on Shenzhen Stock Exchange or Shanghai stock Exchange from the year of2007to2012, there are about6006data for study sample. By calculating the number of female executives on the top management in these listed companies, in order to analyze the possible impact of female executives on corporate performance and validate the intermediary role of human capital and social capital.Results show that, in our listed companies, from2007to2012the proportion of female executive layer present upward trend, the proportion of female executives in2006was13.93%and this proportion compared to15.32%in2012, and the average level reached14.69%. In this paper, more than half of female executives have a bachelor degree or above, however, the rate of female executive who has extensive social capital is low. The empirical analysis shows a positive relationship between the ratio of female executives and corporate performance, the more female executives on the top management the more significant of this promoting role becomes. Furthermore, this positive relationship was strengthened by human capital and social capital. In the following study, result points out that the role of women executive changes in different type of enterprise and it is much more obvious in non-state-owned enterprise than state-owned enterprises. So it is the strengthen role of human capital and social capital. Last but not least, this paper also study the subject of female executives in different type of industry, Evidences show that women managers play different roles among the different type of industry.In this paper, the research testifies the relationship between female executive in top management teams and corporate performance within the listed companies in our country, therefore it enriches the existing analytical framework of the theory of TMT. Based on the current situation of female executives’representation, this paper puts forward some policy recommendations for improving the proportion of female executives in top management teams.