Women on boards and bank earnings management: From zero to hero

Yaoyao Fan, Yuxiang Jiang, Xuezhi Zhang and Yue Zhou

Journal of Banking & Finance, 2019, vol. 107, issue C, -

Abstract: We examine how women on boards influence bank earnings management. Using the likelihood of a board appointing women directors based on a Blau index of gender diversity in each director's total employment connections outside our sample banks for identification, we find an inverted U-shaped relation between women on boards and bank earnings management. Specifically, when there exists only a marginal number of women directors, banks are more likely to manipulate earnings. But, when the number of women directors reaches three or more, bank earnings management declines. This inverted U-shaped impact is intensified if women sit on audit or nomination committees, is moderated if women directors have higher education levels and more board experience, and is unchanged during the 2007–2009 financial crisis. Our results hold when we use alternative measures of bank earnings management, employ GMM estimations and test for alternative hypotheses for the inverted U-shaped relation.

Keywords: Women on boards; Bank earnings management; Critical mass theory (search for similar items in EconPapers)
JEL-codes: G30 G34 M41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:107:y:2019:i:c:16

DOI: 10.1016/j.jbankfin.2019.105607

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