Chen, J orcid.org/0000-0002-4076-7121, Leung, WS, Song, W et al. (1 more author) (2019) Why female board representation matters: The role of female directors in reducing male CEO overconfidence. Journal of Empirical Finance, 53. pp. 70-90. ISSN 0927-5398
Abstract
We suggest a novel reason why there might be a need for female board representation. Female participation in the boardroom attenuates the CEO’s overconfident views about his firm’s prospects as we find that male CEOs at firms with female directors are less likely to hold deep-in-the-money options. Further, we argue that female board representation matters for industries where male CEO overconfidence is more prevalent. We find support for our argument as female directors are associated with less aggressive investment policies, better acquisition decisions, and improved financial performance for firms operating in industries with high overconfidence prevalence. We also identify a market failure around economic crises. Firms that do not have (sufficient) female board representation suffer a greater drop in performance as a result of the crisis than those that have female board representation.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019 Elsevier B.V. All rights reserved. This is an author produced version of an article published in Journal of Empirical Finance. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Female board representation; CEO overconfidence; Investment; Firm performance |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 25 Jun 2019 10:35 |
Last Modified: | 03 Jan 2021 01:38 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jempfin.2019.06.002 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:147598 |
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