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Does gender diversity on banks' boards matter? Evidence from public bailouts

Giovanni Cardillo, Enrico Onali and Giuseppe Torluccio

Journal of Corporate Finance, 2021, vol. 71, issue C

Abstract: We are the first to examine the impact of gender diversity on banks' boards on the probability and size of public bailouts. Our findings, based on a sample of listed European banks over the period 2005–2017, suggest that banks with more gender-diverse boards are less likely to receive a public bailout and receive a lower amount of bailout funds as a percentage of total assets than banks with less gender-diverse boards. Specifically, an increase by one standard deviation in gender diversity decreases the probability of a bailout by at least 2.44%, a significant reduction considering that the unconditional probability is 18.7%. Gender diversity is also positively related to bank performance, as proxied by ROA and Tobin's Q and with dividend payout ratios, consistent with the hypothesis that female directors are better monitors than male directors. These results are robust to a variety of econometric approaches and provide support for recent reforms in several EU countries regarding gender quotas.

Keywords: Corporate governance; Risk; Gender; Performance; Banks; Bailout (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jcorpfin.2020.101560

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