Does Female Management Influence Firm Performance? Evidence from Luxembourg Banks

Regina M. Reinert (), Florian Weigert () and Christoph H. Winnefeld ()

No 1501, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: This study examines the relationship between the proportion of women in top management positions of banks and the financial performance of these institutions. Using prudential data from supervisory reporting for all credit institutions in the Grand-Duchy of Luxembourg from 1999 to 2013, we find a positive association between female management representation and firm performance. The economic effect is substantial: A 10% increase of women in top management positions improves the bank's future return on equity by more than 3% p.a. Moreover, we show that this positive relationship is (i) almost twice as large during the global financial crisis than in stable market conditions and (ii) non-linear with the most successful banks having a female management share in the range between 20% and 40%.

Keywords: Management Diversity; Female Management Representation; Bank Performance (search for similar items in EconPapers)
JEL-codes: G21 J16 L25 M14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015-01
New Economics Papers: this item is included in nep-ban, nep-bec and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2015:01

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