Director gender and mergers and acquisitions

Maurice Levi, Kai Li () and Feng Zhang

Journal of Corporate Finance, 2014, vol. 28, issue C, 185-200

Abstract: Does director gender influence CEO empire building? Does it affect the bid premium paid for target firms? Less overconfident female directors less overestimate merger gains. As a result, firms with female directors are less likely to make acquisitions and if they do, pay lower bid premia. Using acquisition bids by S&P 1500 companies during 1997–2009 we find that each additional female director is associated with 7.6% fewer bids, and each additional female director on a bidder board reduces the bid premium paid by 15.4%. Our findings support the notion that female directors help create shareholder value through their influence on acquisition decisions. We also discuss other possible interpretations of our findings.

Keywords: Director gender; Bid initiation; Bid premium; Mergers and acquisitions; Overconfidence; Risk aversion (search for similar items in EconPapers)
JEL-codes: G34 G38 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (230)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:28:y:2014:i:c:p:185-200

DOI: 10.1016/j.jcorpfin.2013.11.005

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