Female Board Representation,Firm Risk And Merger And Acquisition Performance

As a vital strategic action for economic development of the company,merge and acquisition is gradually appealing to more and more enterprises.As the most conclusive decision-maker in the company,board is responsible for making strategies of the corporation,which will bring huge influences on the performance of merge and acquisition.Recently,there are gradually more female representations in corporations'boards,who participate in strategy decision-making and firm operation actively and have gained remarkable achievements,bringing female leadership into the academic horizon.This phenomenon draws our attention that whether female board representation exerts an effect on the merge and acquisition performance of an enterprise?In addition,nowadays it is not uncommon that each company is surrounded by the condition full of dynamic changes,either the fluctuation of macro economy and market environment,or the changes of internal strategy decision and operation;in other words,it is almost impossible that one company can be under a non-risk environment.However,risk also has an impact on the process of decision making inevitably.In this article,we also focus on whether the relationship between female board representation and merge and acquisition performance will be influenced by the risk that the company is faced with?Specifically,we want to know whether all kinds of firm risks have the same effect on this relationship?Using corporations listed on Shanghai and Shenzhen A-share markets during 2005-2012,based on Upper Echelons Theory,this article exams the effect of female board representation on performance of merge and acquisition.At the same time,we divide firm risk into two distinct dimensions,which are firm market risk and financial risk,and investigate if there are any differences between the effects of these two kinds of firm risks on the main effect.Furthermore,in order to assure the precision of our result,avoiding endogeneity due to sample selection bias,this article adopts Heckman selection model during the whole examination.Our findings support the notion that female board representation can significantly improve the performance of merge and acquisition,and firm risk has an influence on this positive relationship indeed.Interestingly,we also find that different kinds of firm risks have different moderate effects.Specifically,firm market risk will negatively moderate this relationship,while financial risk will have a positive moderate effect.We also give that the explanation for this phenomenon that in comparison to male board representation,female board representation has a higher level of sensitivity of financial risk than that of firm market risk.So when a company is faced with a high level of firm market risk,it will be hard for female board representation to perceive it in time and make an accurate judgment;however,when it is faced with a high level of financial risk,they can perceive the existence and change of this risk timely,which will be helpful to make them be more cautious and reasonable during the process of decision-making,thereby increases the performance of merge and acquisition further.