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Does female management influence firm performance? Evidence from Luxembourg banks

Author

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  • Regina M. Reinert

    (University of St.Gallen and Hogrefe Consulting)

  • Florian Weigert

    (University of St. Gallen)

  • Christoph H. Winnefeld

    (Commission de Surveillance Du Secteur Financier and Trier University of Applied Sciences)

Abstract

In this study, we examine the relationship between the proportion of women in top management positions at banks and these institutions’ financial performance. Using prudential data from supervisory reporting for all credit institutions in the Grand Duchy of Luxembourg from 1999 to 2013, we find a positive association between female management and firm performance. The economic effect is substantial: a 10 % increase in women in top management positions improves the bank’s future return on equity by more than 3 % p.a. Moreover, we show that this positive relationship is (i) almost twice as large during the global financial crisis than in stable market conditions and (ii) non-linear, with banks having 20–40 % female management being the most successful.

Suggested Citation

  • Regina M. Reinert & Florian Weigert & Christoph H. Winnefeld, 2016. "Does female management influence firm performance? Evidence from Luxembourg banks," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(2), pages 113-136, May.
    • Handle: RePEc:kap:fmktpm:v:30:y:2016:i:2:d:10.1007_s11408-016-0266-8
    DOI: 10.1007/s11408-016-0266-8
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    More about this item

    Keywords

    Management diversity; Female management; Bank performance;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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