IDEAS home Printed from https://ideas.repec.org/p/gmf/papers/2020-08.html
   My bibliography  Save this paper

Political connections and remuneration of bank board's members: Moderating effect of gender diversity

Author

Listed:
  • Catarina Proença

    (University of Coimbra, Ph.D. Student at Faculty of Economics)

  • Mário Augusto

    (University of Coimbra, Centre for Business and Economics,CeBER, Faculty of Economics)

  • José Murteira

    (University of Coimbra, Centre for Business and Economics,CeBER, Faculty of Economics)

Abstract

This study investigates the effect of the political connections of members of banks' Boards of Directors on the remuneration of these boards, taking into account the gender diversity of their members. Using a panel of observations on 77 banks supervised by the ECB for the period 2013 to 2017, and the generalized method of moments (GMM), our results show that, when analyzing linear effects, political connections have a negative impact on the remuneration of the members of the banks' Boards of Directors, reducing them. However, when investigating the possible moderating effect, we found that when gender diversity is high, there is a non-linear, inverted U-shaped relationship between the political connections and the remuneration of members of the Boards of Directors of banks. Our results also show that the differentiating characteristics of the female gender, accentuate the negative effects of political connections on remuneration, making the institution's interests to be privileged at the expense of those of its personal agendas. Overall, these general results prove to be robust across different choices of the measures used for gender diversity.

Suggested Citation

  • Catarina Proença & Mário Augusto & José Murteira, 2020. "Political connections and remuneration of bank board's members: Moderating effect of gender diversity," CeBER Working Papers 2020-08, Centre for Business and Economics Research (CeBER), University of Coimbra.
    • Handle: RePEc:gmf:papers:2020-08
    as

    Download full text from publisher

    File URL: https://bee.fe.uc.pt/working-paper/pdf/a176f91047bd45adb828c7eacdff927f/WP_CEBER_2020_.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Political connections; Gender diversity; Remuneration; ECB; GMM.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:gmf:papers:2020-08. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sofia Antunes (email available below). General contact details of provider: https://edirc.repec.org/data/cebucpt.html .

    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.