IDEAS home Printed from https://ideas.repec.org/p/sol/wpaper/2013-320685.html
   My bibliography  Save this paper

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

Author

Listed:
  • Anaïs A Périlleux
  • Ariane Szafarz

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 hand-collected 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 A Périlleux & Ariane Szafarz, 2021. "Women in the Boardroom: A Bottom-up Approach to the Trickle-down Effect," Working Papers CEB 21-005, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/320685
    as

    Download full text from publisher

    File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/320685/3/wp21005.pdf
    File Function: Full text for the whole work, or for a work part
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Simona Comi & Mara Grasseni & Federica Origo & Laura Pagani, 2020. "Where Women Make a Difference: Gender Quotas and Firms’ Performance in Three European Countries," ILR Review, Cornell University, ILR School, vol. 73(3), pages 768-793, May.
    2. Chiara Pronzato & Paola Profeta & Valeria Ferraro & Giulia Ferrari, 2016. "Gender Quotas: Challenging the Boards, Performance, and the Stock Market," Working Papers id:11411, eSocialSciences.
    3. Alessandro Manello & Maurizio Cisi & Francesco Devicienti & Davide Vannoni, 2020. "Networking: a business for women," Small Business Economics, Springer, vol. 55(2), pages 329-348, August.
    4. Anaïs Périlleux & Annabel Vanroose & Bert D'Espallier, 2016. "Are Financial Cooperatives Crowded out by Commercial Banks in the Process of Financial Sector Development?," Kyklos, Wiley Blackwell, vol. 69(1), pages 108-134, February.
    5. Solomon W. Polachek & Konstantinos Tatsiramos & Klaus F. Zimmermann (ed.), 2015. "Gender Convergence in the Labor Market," Research in Labor Economics, Emerald Publishing Ltd, volume 41, number rlec.2015.41, December.
    6. Anastasia Cozarenco & Ariane Szafarz, 2018. "Gender Biases in Bank Lending: Lessons from Microcredit in France," Journal of Business Ethics, Springer, vol. 147(3), pages 631-650, February.
    7. Kevin Campbell & Antonio Mínguez-Vera, 2008. "Gender Diversity in the Boardroom and Firm Financial Performance," Journal of Business Ethics, Springer, vol. 83(3), pages 435-451, December.
    8. Marianne Bertrand & Sandra E Black & Sissel Jensen & Adriana Lleras-Muney, 2019. "Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labour Market Outcomes in Norway," Review of Economic Studies, Oxford University Press, vol. 86(1), pages 191-239.
    9. David A. Matsa & Amalia R. Miller, 2013. "A Female Style in Corporate Leadership? Evidence from Quotas," American Economic Journal: Applied Economics, American Economic Association, vol. 5(3), pages 136-169, July.
    10. Derek Jones & Panu Kalmi, 2015. "Membership and Performance in Finnish Financial Cooperatives: A New View of Cooperatives?," Review of Social Economy, Taylor & Francis Journals, vol. 73(3), pages 283-309, September.
    11. Daehyun Kim & Laura T. Starks, 2016. "Gender Diversity on Corporate Boards: Do Women Contribute Unique Skills?," American Economic Review, American Economic Association, vol. 106(5), pages 267-271, May.
    12. Valentina Hartarska & Denis Nadolnyak & Roy Mersland, 2014. "Are Women Better Bankers to the Poor? Evidence from Rural Microfinance Institutions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1291-1306.
    13. Strøm, Reidar Øystein & D’Espallier, Bert & Mersland, Roy, 2014. "Female leadership, performance, and governance in microfinance institutions," Journal of Banking & Finance, Elsevier, vol. 42(C), pages 60-75.
    14. Ana Rute Cardoso & Rudolf Winter-Ebmer, 2010. "Female-Led Firms and Gender Wage Policies," ILR Review, Cornell University, ILR School, vol. 64(1), pages 143-163, October.
    15. Simon Cornée & Panu Kalmi & Ariane Szafarz, 2020. "The Business Model of Social Banks," Kyklos, Wiley Blackwell, vol. 73(2), pages 196-226, May.
    16. Sara Fisher Ellison & Wallace P. Mullin, 2014. "Diversity, Social Goods Provision, and Performance in the Firm," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 465-481, June.
    17. Chapelle, Ariane & Szafarz, Ariane, 2005. "Controlling firms through the majority voting rule," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 355(2), pages 509-529.
    18. Périlleux, Anaïs & Szafarz, Ariane, 2015. "Women Leaders and Social Performance: Evidence from Financial Cooperatives in Senegal," World Development, Elsevier, vol. 74(C), pages 437-452.
    19. Goedecke, Jann, 2018. "Contagious loan default," Economics Letters, Elsevier, vol. 170(C), pages 14-18.
    20. John Antonakis & Samuel Bendahan & Philippe Jacquart & Rafael Lalive, 2010. "On making causal claims : A review and recommendations," Post-Print hal-02313119, HAL.
    21. Marek Hudon & Marc Labie & Patrick Reichert, 2020. "What is a Fair Level of Profit for Social Enterprise? Insights from Microfinance," Journal of Business Ethics, Springer, vol. 162(3), pages 627-644, March.
    22. Esteban Lafuente & Yancy Vaillant, 2019. "Balance rather than critical mass or tokenism: Gender diversity, leadership and performance in financial firms," International Journal of Manpower, Emerald Group Publishing, vol. 40(5), pages 894-916, August.
    23. Supriya Garikipati & Susan Johnson & Isabelle Guérin & Ariane Szafarz, 2017. "Microfinance and Gender: Issues, Challenges and The Road Ahead," Journal of Development Studies, Taylor & Francis Journals, vol. 53(5), pages 641-648, May.
    24. Marek Hudon & Marc Labie & Patrick Reichert, 2017. "What is a fair profit for social enterprise? Insights from microfinance," Working Papers CEB 17-024, ULB -- Universite Libre de Bruxelles.
    25. Luca Flabbi & Mario Macis & Andrea Moro & Fabiano Schivardi, 2019. "Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance," Economic Journal, Royal Economic Society, vol. 129(622), pages 2390-2423.
    26. Donald E. Gibson, 2003. "Developing the Professional Self-Concept: Role Model Construals in Early, Middle, and Late Career Stages," Organization Science, INFORMS, vol. 14(5), pages 591-610, October.
    27. Isabelle Agier & Ariane Szafarz, 2013. "Subjectivity in credit allocation to micro-entrepreneurs: evidence from Brazil," Small Business Economics, Springer, vol. 41(1), pages 263-275, June.
    28. Francis J. Flynn & Barry M. Staw, 2004. "Lend me your wallets: the effect of charismatic leadership on external support for an organization," Strategic Management Journal, Wiley Blackwell, vol. 25(4), pages 309-330, April.
    29. Sudheer Reddy & Aditya Mohan Jadhav, 2019. "Gender diversity in boardrooms – A literature review," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1644703-164, January.
    30. Tyrefors, Björn & Jansson, Joakim, 2017. "Gender Quotas in the Board Room and Firm Performance: Evidence from a Credible Threat in Sweden," Working Paper Series 1165, Research Institute of Industrial Economics.
    31. Sharma, Manohar & Zeller, Manfred, 1997. "Repayment performance in group-based credit programs in Bangladesh: An empirical analysis," World Development, Elsevier, vol. 25(10), pages 1731-1742, October.
    32. Jasmin Joecks & Kerstin Pull & Karin Vetter, 2013. "Gender Diversity in the Boardroom and Firm Performance: What Exactly Constitutes a “Critical Mass?”," Journal of Business Ethics, Springer, vol. 118(1), pages 61-72, November.
    33. Kausik Chaudhuri & Subash Sasidharan & Rajesh Seethamma Natarajan Raj, 2020. "Gender, small firm ownership, and credit access: some insights from India," Small Business Economics, Springer, vol. 54(4), pages 1165-1181, April.
    34. D'Espallier, Bert & Guérin, Isabelle & Mersland, Roy, 2011. "Women and Repayment in Microfinance: A Global Analysis," World Development, Elsevier, vol. 39(5), pages 758-772, May.
    35. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    36. Beatriz Armendáriz & Jonathan Morduch, 2010. "The Economics of Microfinance, Second Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262014106, December.
    37. Mersland, Roy & Øystein Strøm, R., 2009. "Performance and governance in microfinance institutions," Journal of Banking & Finance, Elsevier, vol. 33(4), pages 662-669, April.
    38. Agier, Isabelle & Szafarz, Ariane, 2013. "Microfinance and Gender: Is There a Glass Ceiling on Loan Size?," World Development, Elsevier, vol. 42(C), pages 165-181.
    39. Wry, Tyler & Lounsbury, Michael, 2013. "Contextualizing the categorical imperative: Category linkages, technology focus, and resource acquisition in nanotechnology entrepreneurship," Journal of Business Venturing, Elsevier, vol. 28(1), pages 117-133.
    40. Petit, Pascale, 2007. "The effects of age and family constraints on gender hiring discrimination: A field experiment in the French financial sector," Labour Economics, Elsevier, vol. 14(3), pages 371-391, June.
    41. Miriam Bruhn & Inessa Love, 2011. "Gender differences in the impact of banking services: evidence from Mexico," Small Business Economics, Springer, vol. 37(4), pages 493-512, November.
    42. Solomon W. Polachek & Konstantinos Tatsiramos & Klaus F. Zimmermann (ed.), 2015. "Gender in the Labor Market," Research in Labor Economics, Emerald Publishing Ltd, volume 42, number rlec.2015.42, December.
    43. Maretno Harjoto & Indrarini Laksmana & Robert Lee, 2015. "Board Diversity and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 132(4), pages 641-660, December.
    44. Cecilia Varendh-Mansson & Tyler Wry & Ariane Szafarz, 2020. "Anchors Aweigh? Then Time to Head Upstream Why we Need to Theorize “Mission” before “Drift”," Working Papers CEB PostPrintCEB024, ULB -- Universite Libre de Bruxelles.
    45. Eugene Bempong Nyantakyi, 2016. "Family ties, firm performance and managerial compensations in African SMEs," Small Business Economics, Springer, vol. 46(3), pages 493-501, March.
    46. Adeabah, David & Gyeke-Dako, Agyapomaa & Andoh, Charles, 2018. "Board gender diversity, corporate governance and bank efficiency in Ghana: a two-stage data envelope analysis (DEA) approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 299-320.
    47. Tate, Geoffrey & Yang, Liu, 2015. "Female leadership and gender equity: Evidence from plant closure," Journal of Financial Economics, Elsevier, vol. 117(1), pages 77-97.
    48. Caspar Rose, 2007. "Does female board representation influence firm performance? The Danish evidence," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 404-413, March.
    49. Nuria Reguera-Alvarado & Pilar Fuentes & Joaquina Laffarga, 2017. "Does Board Gender Diversity Influence Financial Performance? Evidence from Spain," Journal of Business Ethics, Springer, vol. 141(2), pages 337-350, March.
    50. Beck, Thorsten & Behr, Patrick & Madestam, Andreas, 2018. "Sex and credit: Do gender interactions matter for credit market outcomes?," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 380-396.
    51. David A. Waldman & Donald S. Siegel & Mansour Javidan, 2006. "Components of CEO Transformational Leadership and Corporate Social Responsibility," Journal of Management Studies, Wiley Blackwell, vol. 43(8), pages 1703-1725, December.
    52. David A. Carter & Betty J. Simkins & W. Gary Simpson, 2003. "Corporate Governance, Board Diversity, and Firm Value," The Financial Review, Eastern Finance Association, vol. 38(1), pages 33-53, February.
    53. Dermine, J. & de Carvalho, C. Neto, 2006. "Bank loan losses-given-default: A case study," Journal of Banking & Finance, Elsevier, vol. 30(4), pages 1219-1243, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Périlleux, Anaïs & Szafarz, Ariane, 2015. "Women Leaders and Social Performance: Evidence from Financial Cooperatives in Senegal," World Development, Elsevier, vol. 74(C), pages 437-452.
    2. Nguyen, Thi Hong Hanh & Ntim, Collins G. & Malagila, John K., 2020. "Women on corporate boards and corporate financial and non-financial performance: A systematic literature review and future research agenda," International Review of Financial Analysis, Elsevier, vol. 71(C).
    3. Fall, F.S. & Tchakoute Tchuigoua, H. & Vanhems, A. & Simar, L., 2021. "Gender effect on microfinance social efficiency: A robust nonparametric approach," European Journal of Operational Research, Elsevier, vol. 295(2), pages 744-757.
    4. Francesco Devicienti & Elena Grinza & Alessandro Manello & Davide Vannoni, 2016. "Which Are the Benefits of Having more Female Leaders? Evidence from the Use of Part-Time Work in Italy," Carlo Alberto Notebooks 489, Collegio Carlo Alberto.
    5. Périlleux, Anaïs & Szafarz, Ariane, 2015. "Women Leaders and Social Performance: Evidence from Financial Cooperatives in Senegal," World Development, Elsevier, vol. 74(C), pages 437-452.
    6. Carbonero, Francesco & Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2021. "Women on board and firm export attitudes: Evidence from Italy," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 159-175.
    7. Strøm, Reidar Øystein & D’Espallier, Bert & Mersland, Roy, 2014. "Female leadership, performance, and governance in microfinance institutions," Journal of Banking & Finance, Elsevier, vol. 42(C), pages 60-75.
    8. Simona, Comi & Mara, Grasseni & Federica, Origo & Laura, Pagani, 2017. "Where Women Make The Difference. The Effects of Corporate Board Gender Quotas on Firms’ Performance across Europe," Working Papers 367, University of Milano-Bicocca, Department of Economics, revised 12 Jul 2017.
    9. Garanina, Tatiana & Muravyev, Alexander, 2021. "The gender composition of corporate boards and firm performance: Evidence from Russia," Emerging Markets Review, Elsevier, vol. 48(C).
    10. Sanjukta Brahma & Chioma Nwafor & Agyenim Boateng, 2021. "Board gender diversity and firm performance: The UK evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5704-5719, October.
    11. Sultan Sikandar Mirza & Muhammad Ansar Majeed & Tanveer Ahsan, 2020. "Board gender diversity, competitive pressure and investment efficiency in Chinese private firms," Post-Print hal-02956320, HAL.
    12. Geeta Duppati & Narendar V. Rao & Neha Matlani & Frank Scrimgeour & Debasis Patnaik, 2020. "Gender diversity and firm performance: evidence from India and Singapore," Applied Economics, Taylor & Francis Journals, vol. 52(14), pages 1553-1565, March.
    13. Laura Cabeza-García & Esther B. Brío & Carlos Rueda, 2021. "The moderating effect of innovation on the gender and performance relationship in the outset of the gender revolution," Review of Managerial Science, Springer, vol. 15(3), pages 755-778, April.
    14. Donato Masciandaro & Paola Profeta & Davide Romelli, 2020. "Do Women Matter in Monetary Policy Boards?," BAFFI CAREFIN Working Papers 20148, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    15. Sultan Sikandar Mirza & Muhammad Ansar Majeed & Tanveer Ahsan, 2020. "Board gender diversity, competitive pressure and investment efficiency in Chinese private firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 417-440, September.
    16. Cozarenco, Anastasia & Szafarz, Ariane, 2020. "The regulation of prosocial lending: Are loan ceilings effective?," Journal of Banking & Finance, Elsevier, vol. 121(C).
    17. Paul B. McGuinness & João Paulo Vieito & Mingzhu Wang, 2020. "Proactive government intervention, board gender balance, and stakeholder engagement in China and Europe," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 719-762, September.
    18. Agata Maida & Andrea Weber, 2022. "Female Leadership and Gender Gap within Firms: Evidence from an Italian Board Reform," ILR Review, Cornell University, ILR School, vol. 75(2), pages 488-515, March.
    19. Daudi Pascal & Leif Atle Beisland & Roy Mersland, 2016. "The origin of CEOs and its influence on microfinance performance and risk-taking," Working Papers CEB 16-046, ULB -- Universite Libre de Bruxelles.
    20. Evans Gary L., 2018. "Bold vision: Gender diversity stuck in transition," Economics and Business Review, Sciendo, vol. 4(4), pages 97-114, November.

    More about this item

    Keywords

    Gender; Board; Trickle-Down Effect; CEO; Performance; 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sol:wpaper:2013/320685. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/cebulbe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Benoit Pauwels (email available below). General contact details of provider: https://edirc.repec.org/data/cebulbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.