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Women in C-suite: Does Top Management Team gender diversity matter? Evidence from firm investment efficiency

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  • Chowdhury, Md Raihan Uddin
  • Alam, Md Asif Ul
  • Devos, Erik
  • Chy, Md Kamrul Hasan

Abstract

Firms with relatively more female executives in their top management team exhibit superior investment efficiency. Economically, female non-CEO executives increase investment efficiency by almost 11 % of the cross-sectional mean of our investment efficiency measure. Further analysis shows that this increase in efficiency is driven by the reduction in both overinvestment and underinvestment. In addition, efficiency is more pronounced in less competitive markets, during industry shock periods, and in firms with less competent or outsider CEOs. Our findings highlight that women in C-suite play a significant positive role in effective investment decision-making.

Suggested Citation

  • Chowdhury, Md Raihan Uddin & Alam, Md Asif Ul & Devos, Erik & Chy, Md Kamrul Hasan, 2024. "Women in C-suite: Does Top Management Team gender diversity matter? Evidence from firm investment efficiency," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005039
    DOI: 10.1016/j.irfa.2024.103571
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    More about this item

    Keywords

    Investment efficiency; Female non-CEO executives; Market competition; Industry downturns; Managerial ability;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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