An Empirical Study Of Women Directors And Firm Performance

Norway introduced gender quotas first,then followed by many other regions and countries.Undoubtedly,the board gender diversity has become a hot topic.The study of the impact of female directors on firm performance got a lot of attention,however,neither domestic nor foreign scholars reach an agreement.According to the theories of Upper Echelons,Resource Dependence and Corporate Governance,this article learn from the core idea of foreign research and examines the effect of board gender diversity on firm performance.Firm performance reflects in many aspects,among them,the financial index method may be a direct prospective.Therefore,the primary measures of firm performance are return on sales and return on assets.This paper employs both the percent and the number of women directors on board as measures of gender diversity.This paper examines the effect of board gender diversity on firm performance in China's listed firms from 2004 to 2014,then examines through which channel(s)female directors influence firm performance and if corporate ownership influences the relation between women directors and firm performance.This paper found that:(1)female directors can significantly influence firm performance,there is a significant positive correlation between the percent of women directors on board and firm performance.(2)boards with three or more female directors have a strong impact on firm performance.(3)both female executive directors and female independent directors have a strong positive effect on firm performance,indicating the executive effect and the monitoring effect.(4)the impact of female directors on firm performance is significant in non state-controlled firms but not significant in state-controlled firms.In short,the study found that female directors can enhance the board governance mechanism,improve an organization's monitoring and decision-making,reduce the agency cost and finally improve the firm performance.