IDEAS home Printed from https://ideas.repec.org/a/wly/ijfiec/v26y2021i1p185-207.html
   My bibliography  Save this article

Read between the lines: Board gender diversity, family ownership, and risk‐taking in Indian high‐tech firms

Author

Listed:
  • Abubakr Saeed
  • Syed Shafqat Mukarram
  • Yacine Belghitar

Abstract

This article examines the effect of board gender diversity on firm risk‐taking level. Drawing on the contingency framework, we contend that the influence of women executives on firm risk‐taking depends largely on the organizational context of the firm such as the industry in which it operates. To investigate this proposition, we compare the influence of board gender diversity on firm risk‐taking level in Indian high‐tech and in non‐high‐tech sectors. Our findings indicate that female executives operating in high‐tech sectors take more risk than their counterparts female executives who operate in non‐high sector. Interestingly, our analysis also reveals that family ownership negatively moderates the impact of female executives on risk‐taking in high‐tech firms. In additional analysis, we find that female executives exert a positive impact on firm performance only in high‐tech sector. This suggests that the influence of female executives on firm outcomes is not always straightforward.

Suggested Citation

  • Abubakr Saeed & Syed Shafqat Mukarram & Yacine Belghitar, 2021. "Read between the lines: Board gender diversity, family ownership, and risk‐taking in Indian high‐tech firms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 185-207, January.
    • Handle: RePEc:wly:ijfiec:v:26:y:2021:i:1:p:185-207
    DOI: 10.1002/ijfe.1784
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/ijfe.1784
    Download Restriction: no
    File URL: https://libkey.io/10.1002/ijfe.1784?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jayati Sarkar & Ekta Selarka, 2015. "Women on Board and Performance of Family Firms: Evidence from India," Working Papers 2015-130, Madras School of Economics,Chennai,India.
    2. Bin Srinidhi & Ferdinand A. Gul & Judy Tsui, 2011. "Female Directors and Earnings Quality," Contemporary Accounting Research, John Wiley & Sons, vol. 28(5), pages 1610-1644, December.
    3. Holmstrom, Bengt, 1989. "Agency costs and innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 12(3), pages 305-327, December.
    4. David Souder & Akbar Zaheer & Harry Sapienza & Rebecca Ranucci, 2017. "How family influence, socioemotional wealth, and competitive conditions shape new technology adoption," Strategic Management Journal, Wiley Blackwell, vol. 38(9), pages 1774-1790, September.
    5. Ji Li & Fuqiang Zhao & Silu Chen & Wanxing Jiang & Tao Liu & Shengping Shi, 2017. "Gender Diversity on Boards and Firms’ Environmental Policy," Business Strategy and the Environment, Wiley Blackwell, vol. 26(3), pages 306-315, March.
    6. Green, Colin P. & Homroy, Swarnodeep, 2018. "Female directors, board committees and firm performance," European Economic Review, Elsevier, vol. 102(C), pages 19-38.
    7. Nobuyoshi Yamori & Kozo Harimaya & Kei Tomimura, 2017. "Corporate governance structure and efficiencies of cooperative banks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 22(4), pages 368-378, October.
    8. Jeremy C. Stein, 1989. "Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 655-669.
    9. Bernile, Gennaro & Bhagwat, Vineet & Yonker, Scott, 2018. "Board diversity, firm risk, and corporate policies," Journal of Financial Economics, Elsevier, vol. 127(3), pages 588-612.
    10. Renée B. Adams & Patricia Funk, 2012. "Beyond the Glass Ceiling: Does Gender Matter?," Management Science, INFORMS, vol. 58(2), pages 219-235, February.
    11. Berger, Allen N. & Kick, Thomas & Schaeck, Klaus, 2014. "Executive board composition and bank risk taking," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 48-65.
    12. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    13. Holmström, Bengt, 1989. "Agency Costs and Innovation," Working Paper Series 214, Research Institute of Industrial Economics.
    14. Khaw, Karren Lee-Hwei & Liao, Jing & Tripe, David & Wongchoti, Udomsak, 2016. "Gender diversity, state control, and corporate risk-taking: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 39(C), pages 141-158.
    15. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    16. Martin R.W. Hiebl, 2012. "Risk aversion in family firms: what do we really know?," Journal of Risk Finance, Emerald Group Publishing, vol. 14(1), pages 49-70, December.
    17. Shamsul N. Abdullah & Ku Nor Izah Ku Ismail & Lilac Nachum, 2016. "Does having women on boards create value? The impact of societal perceptions and corporate governance in emerging markets," Strategic Management Journal, Wiley Blackwell, vol. 37(3), pages 466-476, March.
    18. Gull, Ammar Ali & Nekhili, Mehdi & Nagati, Haithem & Chtioui, Tawhid, 2018. "Beyond gender diversity: How specific attributes of female directors affect earnings management," The British Accounting Review, Elsevier, vol. 50(3), pages 255-274.
    19. Graham, John R. & Harvey, Campbell R. & Puri, Manju, 2013. "Managerial attitudes and corporate actions," Journal of Financial Economics, Elsevier, vol. 109(1), pages 103-121.
    20. Wenyi Chu, 2009. "The influence of family ownership on SME performance: evidence from public firms in Taiwan," Small Business Economics, Springer, vol. 33(3), pages 353-373, October.
    21. Alberto Galasso & Timothy S. Simcoe, 2011. "CEO Overconfidence and Innovation," Management Science, INFORMS, vol. 57(8), pages 1469-1484, August.
    22. Luis Gomez-Mejia & Ionela Neacsu & Geoffrey Martin, 2017. "CEO Risk-Taking and Socioemotional Wealth: The Behavioral Agency Model, Family Control, and CEO Option Wealth," Post-Print hal-02131945, HAL.
    23. Kang, Eugene & Ding, David K. & Charoenwong, Charlie, 2010. "Investor reaction to women directors," Journal of Business Research, Elsevier, vol. 63(8), pages 888-894, August.
    24. L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications - Books, The World Bank Group, number 6632, December.
    25. Matthew S. Kraatz & Edward J. Zajac, 2001. "How Organizational Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence," Organization Science, INFORMS, vol. 12(5), pages 632-657, October.
    26. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    27. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    28. Huang, Jiekun & Kisgen, Darren J., 2013. "Gender and corporate finance: Are male executives overconfident relative to female executives?," Journal of Financial Economics, Elsevier, vol. 108(3), pages 822-839.
    29. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    30. Levi, Maurice & Li, Kai & Zhang, Feng, 2014. "Director gender and mergers and acquisitions," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 185-200.
    31. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    32. Atreya Chakraborty & Lucia Silva Gao & Shahbaz Sheikh, 2019. "Does size affect the relation between option compensation and managerial risk taking? Evidence from Canadian listed companies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 20-32, January.
    33. Campbell, John Y, 1996. "Understanding Risk and Return," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 298-345, April.
    34. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    35. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 113, pages 1061-1073, Elsevier.
    36. Sila, Vathunyoo & Gonzalez, Angelica & Hagendorff, Jens, 2016. "Women on board: Does boardroom gender diversity affect firm risk?," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 26-53.
    37. Narayanan, M P, 1985. "Observability and the Payback Criterion," The Journal of Business, University of Chicago Press, vol. 58(3), pages 309-323, July.
    38. Wintoki, M. Babajide & Linck, James S. & Netter, Jeffry M., 2012. "Endogeneity and the dynamics of internal corporate governance," Journal of Financial Economics, Elsevier, vol. 105(3), pages 581-606.
    39. Nakano, Makoto & Nguyen, Pascal, 2012. "Board size and corporate risk-taking: Further evidence from Japan," MPRA Paper 38990, University Library of Munich, Germany.
    40. Jo-Hui Chen, 2003. "Association between Credit Rating Changes and High-Tech M&A in Taiwan," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 8(3), pages 77-95, Fall.
    41. Shou-Min Tsao & Wei-Hao Lien, 2013. "Family Management and Internationalization: The Impact on Firm Performance and Innovation," Management International Review, Springer, vol. 53(2), pages 189-213, April.
    42. Gull, Ammar Ali & Nekhili, Mehdi & Nagati, Haithem & Chtioui, Tawhid, 2018. "Beyond gender diversity: How specific attributes of female directors affect earnings management," The British Accounting Review, Elsevier, vol. 50(3), pages 255-274.
    43. Zwiebel, Jeffrey, 1995. "Corporate Conservatism and Relative Compensation," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 1-25, February.
    44. Terjesen, Siri & Sealy, Ruth, 2016. "Board Gender Quotas: Exploring Ethical Tensions From A Multi-Theoretical Perspective," Business Ethics Quarterly, Cambridge University Press, vol. 26(1), pages 23-65, January.
    45. Magnus Talberg & Christian Winge & Stein Frydenberg & Sjur Westgaard, 2008. "Capital Structure Across Industries," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 15(2), pages 181-200.
    46. Liao, Lin & Luo, Le & Tang, Qingliang, 2015. "Gender diversity, board independence, environmental committee and greenhouse gas disclosure," The British Accounting Review, Elsevier, vol. 47(4), pages 409-424.
    47. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Farzan Yahya & Li Meiling & Chien‐Chiang Lee & Muhammad Waqas & Zhang Shaohua, 2022. "Gender diversity, sustainability reporting, CEO overconfidence, and efficient risk‐taking: Evidence from South Asian agri‐food industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(3), pages 219-238, September.
    2. Raheel Mumtaz & Muhammad Farooq Rehan & Quaisar Ijaz Khan & Rubab Zaidi, 2021. "Board Gender Diversity, Firm Performance and Risk-Taking: The Case of Non-Financial Firms of Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(3), pages 354-367, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Syed Shafqat Mukarram & Abubakr Saeed & Shawkat Hammoudeh & Muhammad Mustafa Raziq, 2018. "Women on Indian boards and market performance: a role-congruity theory perspective," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 4-36, February.
    2. Young Zik Shin & Jeung-Yoon Chang & Kyeongmin Jeon & Hyunpyo Kim, 2020. "Female directors on the board and investment efficiency: evidence from Korea," Asian Business & Management, Palgrave Macmillan, vol. 19(4), pages 438-479, September.
    3. Poletti-Hughes, Jannine & Briano-Turrent, Guadalupe C., 2019. "Gender diversity on the board of directors and corporate risk: A behavioural agency theory perspective," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 80-90.
    4. Harakeh, Mostafa & Leventis, Stergios & El Masri, Tarek & Tsileponis, Nikolaos, 2023. "The moderating role of board gender diversity on the relationship between firm opacity and stock returns," The British Accounting Review, Elsevier, vol. 55(4).
    5. Nguyen, Thi Hong Hanh & Ntim, Collins G. & Malagila, John K., 2020. "Women on corporate boards and corporate financial and non-financial performance: A systematic literature review and future research agenda," International Review of Financial Analysis, Elsevier, vol. 71(C).
    6. Cardillo, Giovanni & Onali, Enrico & Torluccio, Giuseppe, 2021. "Does gender diversity on banks' boards matter? Evidence from public bailouts," Journal of Corporate Finance, Elsevier, vol. 71(C).
    7. Abinzano, Isabel & Martinez, Beatriz & Poletti-Hughes, Jannine, 2023. "Women in power with power: The influence of meaningful board representation on default risk," International Review of Financial Analysis, Elsevier, vol. 89(C).
    8. Schopohl, Lisa & Urquhart, Andrew & Zhang, Hanxiong, 2021. "Female CFOs, leverage and the moderating role of board diversity and CEO power," Journal of Corporate Finance, Elsevier, vol. 71(C).
    9. Fan, Yaoyao & Jiang, Yuxiang & Zhang, Xuezhi & Zhou, Yue, 2019. "Women on boards and bank earnings management: From zero to hero," Journal of Banking & Finance, Elsevier, vol. 107(C), pages 1-1.
    10. Muhammad Nadeem, 2022. "Board Gender Diversity and Managerial Obfuscation: Evidence from the Readability of Narrative Disclosure in 10-K Reports," Journal of Business Ethics, Springer, vol. 179(1), pages 153-177, August.
    11. Bill Francis & Iftekhar Hasan & Jong Chool Park & Qiang Wu, 2015. "Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1285-1318, September.
    12. Faccio, Mara & Marchica, Maria-Teresa & Mura, Roberto, 2016. "CEO gender, corporate risk-taking, and the efficiency of capital allocation," Journal of Corporate Finance, Elsevier, vol. 39(C), pages 193-209.
    13. Doan, Trang & Iskandar-Datta, Mai, 2020. "Are female top executives more risk-averse or more ethical? Evidence from corporate cash holdings policy," Journal of Empirical Finance, Elsevier, vol. 55(C), pages 161-176.
    14. McGuinness, Paul B., 2021. "Board member age, stock seasoning and the evolution of capital structure in Chinese firms," International Business Review, Elsevier, vol. 30(3).
    15. Kara, Alper & Nanteza, Aziidah & Ozkan, Aydin & Yildiz, Yilmaz, 2022. "Board gender diversity and responsible banking during the COVID-19 pandemic," Journal of Corporate Finance, Elsevier, vol. 74(C).
    16. García Lara, Juan Manuel & García Osma, Beatriz & Mora, Araceli & Scapin, Mariano, 2017. "The monitoring role of female directors over accounting quality," Journal of Corporate Finance, Elsevier, vol. 45(C), pages 651-668.
    17. García, C. José & Herrero, Begoña, 2022. "Corporate entrepreneurship and governance: Mergers and acquisitions in Europe," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    18. Ayman Issa & Mohammad A. A. Zaid & Jalal Rajeh Hanaysha, 2022. "Exploring the relationship between female director's profile and sustainability performance: Evidence from the Middle East," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1980-2002, September.
    19. Sah, Nilesh B., 2021. "Cash is Queen: Female CEOs’ propensity to hoard cash," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    20. Kubo, Katsuyuki & Nguyen, Thanh Thi Phuong, 2021. "Female CEOs on Japanese corporate boards and firm performance," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ijfiec:v:26:y:2021:i:1:p:185-207. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.interscience.wiley.com/jpages/1076-9307/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.