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Do Women in Top Management Affect Firm Performance? Evidence from Indonesia

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  • Darmadi, Salim
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    Abstract

    This paper investigates the relationship between gender diversity on management boards and financial performance of Indonesian listed companies. We conduct cross-sectional regression analysis based on a sample comprising 92.4 percent of public firms listed on the Indonesia Stock Exchange (IDX). We find that the representation of female top executives is negatively related to both accounting and market performance, suggesting that female representation is not associated with improved level of performance. From correlation analysis, our results also reveal that smaller firms, which tend to be family-controlled, are more likely to have higher proportion of female members on management boards. This implies that large firms are “tougher” for women in terms of opportunities to hold seats on the board.

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    File URL: http://mpra.ub.uni-muenchen.de/38743/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38743.

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    Date of creation: 01 Dec 2010
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    Handle: RePEc:pra:mprapa:38743

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    Related research

    Keywords: Corporate governance; Gender diversity; Female representation; Financial performance; Indonesia;

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    17. Eklund, Johan & Palmberg, Johanna & Wiberg, Daniel, 2009. "Ownership Structure, Board Composition and Investment Performance," Ratio Working Papers 129, The Ratio Institute.
    18. Claude Francoeur & Réal Labelle & Bernard Sinclair-Desgagné, 2008. "Gender Diversity in Corporate Governance and Top Management," Journal of Business Ethics, Springer, vol. 81(1), pages 83-95, August.
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