What is it about?
We investigate the relation between board gender diversity and firm profitability using the control function (CF) approach recently suggested by Wooldridge (2015). The CF method takes account of the problem of endogenous explanatory variables that have potential to bias the results.
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Why is it important?
We find that the presence of women on corporate boards has a positive and significant effect on firm profitability. Through this study, we shed light on the effect of women on corporate boards on firm performance, as it is still a controversial issue (Post and Byron, 2015).
Perspectives
Our findings has policy implication andinform dcision makers that gender diversity could improve performance of firms.
Dr Krishna Reddy
Toi Ohomai Institute of Technology
Read the Original
This page is a summary of: Does board gender diversity influence firm profitability? A control function approach, Economic Modelling, August 2020, Elsevier,
DOI: 10.1016/j.econmod.2020.05.009.
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