Does Board Gender Diversity Improve the Firm Performance?

Abstract

[Purpose]This study investigates whether gender diversity of the board of directors affects corporate performance, especially in country where chaebol－driven corporate ownership structure are well developed. In particular, gender diversity is defined as inside directors’ gender diversity who are likely to be involved in decision－making related to corporate management activities to examine the association with corporate performance. [Methodology]This study conduct fixed effect regression to address endogeneity issue, and my sample consists of 3845 Korean companies listed on the Korea Exchange. [Findings]The empirical result demonstrates that board gender diversity for inside director positively affect firm performance. [Implications]This study adds to corporate governance literature by examining the link between the gender diversity of the board of directors and firm financial performance. In addition, this study provides policy implications to investor and regulatory bodies at important times as the Korean government is in the process of mandating corporate gender quotas in the private sector.