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Share buybacks and gender diversity

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  • Evgeniou, Theodoros
  • Vermaelen, Theo

Abstract

We find that board gender diversity increases the likelihood that firms announce a buyback but long-term excess returns are significantly smaller when there is larger female representation on the board. This is consistent with the governance hypothesis: gender diversity makes it more likely that firms buy back stock to reduce agency costs of free cash flow. But because gender diversity improves the quality of public information disclosure repurchases are less driven by market timing. Moreover, when the quality of monitoring is lower because board members sit on many other boards, long-term excess returns are larger.

Suggested Citation

  • Evgeniou, Theodoros & Vermaelen, Theo, 2017. "Share buybacks and gender diversity," Journal of Corporate Finance, Elsevier, vol. 45(C), pages 669-686.
    • Handle: RePEc:eee:corfin:v:45:y:2017:i:c:p:669-686
    DOI: 10.1016/j.jcorpfin.2017.06.005
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    6. Nitesh Pandey & Satish Kumar & Corinne Post & John W. Goodell & Rebeca García-Ramos, 2023. "Board gender diversity and firm performance: A complexity theory perspective," Asia Pacific Journal of Management, Springer, vol. 40(3), pages 1289-1320, September.
    7. Liu, Chelsea, 2018. "Are women greener? Corporate gender diversity and environmental violations," Journal of Corporate Finance, Elsevier, vol. 52(C), pages 118-142.
    8. Su, Xuan-Qi & Lin, Yung-Chieh & Chen, Chin-Ming & Lowe, Alpha, 2019. "Are educational managers credible or overconfident? Evidence from share repurchases in Taiwan," Pacific-Basin Finance Journal, Elsevier, vol. 56(C), pages 93-112.
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