Do women in top management affect firm performance?A panel study of 2,500 Danish firms

Abstract

Do Women in Top Management Affect Firm Performance?A Panel Study of 2500 Danish Firms * Corporate governance literature argues that board diversity is potentially positively related to firm performance. This study examines the relationship in the case of women in top executive jobs and on boards of directors. We use data for the 2500 largest Danish firms observed during the period 1993-2001 and find that the proportion of women in top management jobs tends to have positive effects on firm performance, even after controlling for numerous characteristics of the firm and direction of causality. The results show that the positive effects of women in top management depend on the qualifications of female top managers.JEL Classification: G38, J16, M14

Gender quotas on boards of directors

“…For instance, in Denmark only 7% of the CEOs of companies with more than 50 employees are women [8]. The figure is not very different for Norway [4].…”

“…These provisions seem to have had an unintended boomerang effect, however. Studies show that children are an important explanatory factor for the divergence in men's and women's careers, even when controlling for level of education [8]. Besides the direct negative effects on experience and human capital of taking long parental leave, there may be more subtle effects on gender norms and stereotyping, especially when women avail themselves of parental leave more frequently than men do.…”

“…Second, the McKinsey report, for instance, does not distinguish between management and corporate board members, even though the impacts might be quite different [7]. Another study found a positive impact on firm performance for women in senior management roles, but no impact or even a negative one for nonexecutive female directors [8].…”

Board diversity and firm performance: The Indonesian evidence

“…In Europe, the evidence of positive associations between gender diversity and financial performance comes from Denmark (Smith et al, 2005) and Spain (Campbell and Minguez-Vera, 2008). In the context of emerging markets, Ararat et al (2010) provide evidence of such positive associations using a sample of the Turkish listed firms.…”

Relationship Between Inflation and Real Economic Growth in Rwanda

“…Smith and Verner (2006) found that the proportion of women in top management jobs had a positive effect on a firm's performance and that the effect depended on the qualifications of female top managers in Denmark. Dawkins et al (2007) argue that both large firms and those which are highly specialized, enjoy higher profit margins, whereas the more capital intensive the firm the lower its profitability.…”