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Listed zombie firms and top executive gender: Evidence from an emerging market

Author

Listed:
  • Fang, Jianchun
  • Gozgor, Giray
  • Lau, Chi-Keung Marco
  • Wu, Wanshan
  • Yan, Cheng

Abstract

This paper examines the implication of top executive gender on the zombie likelihood of firms listed in China's stock market. Our investigation shows that an increase in female executive percentage can significantly reduce corporate risk and zombie likelihood. This reduction in zombie likelihood is mainly achieved by the financial supervision of the female CFOs, mainly through the channels of quality improvement in information disclosure as well as in corporate governance. By contrast, loans and subsidies from local governments and financial institutions do not improve the performance of listed companies but increase zombie likelihood. Female executives' previous appointments with government agencies and financial institutions increase zombie likelihood as well. The academic background of female executives does not affect zombie likelihood. These findings provide insights into the relationship between executive gender diversity and corporate governance. We provide policy recommendations to help address the issue of zombie firms in China.

Suggested Citation

  • Fang, Jianchun & Gozgor, Giray & Lau, Chi-Keung Marco & Wu, Wanshan & Yan, Cheng, 2020. "Listed zombie firms and top executive gender: Evidence from an emerging market," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:pacfin:v:62:y:2020:i:c:s0927538x20300974
    DOI: 10.1016/j.pacfin.2020.101357
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    More about this item

    Keywords

    Executive gender; Zombie firms; Corporate governance; China;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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