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Women in the Boardroom: A Bottom-up Approach to the Trickle-down Effect

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  • Anaïs, Périlleux

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Ariane Szafarz

    (ULB, New York University, CEB and CERMI)

Abstract

This paper argues that role modeling can explain the impact of boardroom gender diversity on corporate performance. It theorizes that female workers are boosted by female leadership, gain increased motivation, and achieve greater productivity, thereby making their female directors more effective. We test this bottom-up approach to the trickle-down hypothesis on data handcollected among local cooperatives providing microcredit in Senegal. All the organizations surveyed are similar and small, which allows us to use a homogenous performance metric. All of them outsource their human resource management to the same third party, which mitigates the risk of endogeneity. The data cover over 100,000 triads composed of: gender dominance on the board, gender of CEO, and gender of credit officer. A better financial performance is achieved when the triad is gender-uniform—be it male or female—confirming the importance of role modeling and suggesting that the performance of female board members depends on the gender composition of the workforce.

Suggested Citation

  • Anaïs, Périlleux & Ariane Szafarz, 2021. "Women in the Boardroom: A Bottom-up Approach to the Trickle-down Effect," LIDAM Discussion Papers IRES 2021012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2021012
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    More about this item

    Keywords

    Gender; Board; Trickle-Down Effect; CEO; Perfomance; Leadership;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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