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Do women on corporate boards influence corporate social performance? A control function approach

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  • Dang, Rey
  • Houanti, L'Hocine
  • Sahut, Jean-Michel
  • Simioni, Michel

Abstract

We examine if women on corporate boards (WOCB) influence a firm's corporate social performance (CSP). To do this, we utilize stakeholder theory. From an empirical standpoint, we use the control function (CF) approach suggested by Wooldridge (2015), which takes into account the issue of endogeneity raised in the literature (namely, omitted variables, reverse causality, and dynamic endogeneity). Using a sample of firms from the S&P 500 between 2004 and 2015, we find that WOCB have a positive and significant effect (at the 5% level) on CSP. We compare our results to more traditional approaches (pooled OLS, the fixed-effects model, and system GMM). We shed light on an issue that is still considered controversial (Byron and Post, 2016).

Suggested Citation

  • Dang, Rey & Houanti, L'Hocine & Sahut, Jean-Michel & Simioni, Michel, 2021. "Do women on corporate boards influence corporate social performance? A control function approach," Finance Research Letters, Elsevier, vol. 39(C).
  • Handle: RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319315065
    DOI: 10.1016/j.frl.2020.101645
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    More about this item

    Keywords

    Women on corporate boards; Corporate social responsibility; Corporate social performance; Institutional theory; Control function;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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