Unveiling Her Efforts: Gender Diversity’s Impact on Performance Commitments in M&As

This study empirically examines how gender-diverse leadership teams influence the outcomes of mergers and acquisitions (M&As) by signing performance commitment contracts (PCs) to unveil the efforts of women corporate leaders in the M&A process. Using a sample of Chinese firms from 2009 to 2021, we find that gender-diverse leadership increases the likelihood of signing PCs in M&As. The strength of this effect depends not only by the number of women in leadership and the power they hold but also by the organizational environment that enables women to exercise leadership more effectively, such as meeting frequency and gender equality culture. Furthermore, we find that ethical leadership and risk-averse attitudes are two channels through which women leaders affect PC design at both the firm and PC terms levels. Although M&A parties can benefit from PCs signed by gender-diverse leadership, we observe that the stock market fails to anticipate the incremental value that women leaders may bring to the M&As during the announcements, which implies that the visibility of the value brought by women leaders remains limited in the current Chinese capital market.