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Does Gender Diversity in the Boardroom Improve Firm Performance? Evidence from Indonesia

Author

Listed:
  • Pananda Pasaribu

    (Sampoerna University, Jakarta)

  • Masripah

    (Universitas Pembangunan Nasional Veteran Jakarta)

  • Bonnie Mindosa

    (Institut Bisnis dan Informatika Kwik Kian Gie, Jakarta)

Abstract

This study investigates board gender diversity in Indonesia’s listed firms and its effect on firm performance from 2011–2016. After addressing the endogeneity of diversity, the results in this paper show that the proportion of female in the boardroom marginally improve firm performance. Firms with two or more female in the boardroom have a stronger impact on firm performance than firms with one female in the boardroom, consistent with the critical mass effect. Finally, certain sectors will gain more benefits of appointing females in the boardroom. The results suggest that increasing gender diversity in the boardrooms can have beneficial effects on firm performance, but the benefits may be subject to the critical mass and firm industry.

Suggested Citation

  • Pananda Pasaribu & Masripah & Bonnie Mindosa, 2019. "Does Gender Diversity in the Boardroom Improve Firm Performance? Evidence from Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 65, pages 1-19, Juni.
    • Handle: RePEc:lpe:efijnl:201901
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    More about this item

    Keywords

    board diversity; tokenism problem; industry effect;
    All these keywords.

    JEL classification:

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

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