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The long-term effects of female board representation on accounting quality: Causal evidence

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  • Mahmoud Ahmed

    (Sohag University)

Abstract

This paper investigates how women’s representation on corporate boards affects financial reporting quality. Drawing on a discussion of existing research, I argue that increasing women’s representation on boards reduces undue CEO influence over the board, and thereby, accounting quality will improve. Using a difference-in-difference (DiD) approach, this paper documents how increasing female representation increases accounting quality. This result holds only in the long run as females gain more experience in the boardroom. In addition, I show that the effect of female representation on accounting quality is attenuated for larger firms and larger boards. This is consistent with the notion that the effect of female representation is likely to be stronger when the information friction is higher. These findings challenge the conventions that underscore the importance of board diversity for today’s firms.

Suggested Citation

  • Mahmoud Ahmed, 2023. "The long-term effects of female board representation on accounting quality: Causal evidence," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 20(2), pages 109-118, June.
    • Handle: RePEc:pal:ijodag:v:20:y:2023:i:2:d:10.1057_s41310-021-00109-1
    DOI: 10.1057/s41310-021-00109-1
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    More about this item

    Keywords

    Women’s representation; Board of directors; Accounting quality;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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