| dc.description.abstract | This paper explores the intricate relationship between boardroom gender diversity and firm
performance. Aiming to establish a causal pattern of how female board members could affect
firm performance, we propose innovation as a possible mediator.
We define gender diversity as the female share on boards and cover financial performance
from both accounting (ROA & ROE) and market (market-to-book ratio, Tobin’s Q)
perspectives. Using R&D expenditures and patent applications as proxies for innovation,
alongside other control variables, we conduct step-by-step mediation analysis on an
unbalanced panel of 867 listed companies in Sweden, Norway, Finland, or Denmark from
2000 to 2022. We also use difference-in-differences (DiD) regressions, focusing on the 2008
board gender quota in Norway as an alternative approach when relevant.
The mediation analysis using pooled OLS and panel regressions discovers no effect of
diversity on market performance and no positive effect on accounting returns, which disappear
when firm-fixed effects are added. The effect of diversity on innovation varies from negative
to positive, depending on the model specifications. Innovation is associated with improved
market performance and negative or no effect on accounting returns, depending on the fixed
effects used. Innovation (R&D spending) is recognized to mediate the relationship between
gender diversity and performance (ROA or ROE) in a few specific setups, but generally,
evidence for innovation as a mediator is weak.
Alternatively, the DiD regressions show some evidence of linking the quota and, thus, gender
diversity to negative effects on ROA and market to book ratio and positive on R&D spending. | en_US |
