Does Gender Diversity in the Boardroom Improve Firm Performance? Evidence from Indonesia

Pananda Pasaribu, Masripah and Bonnie Mindosa
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Pananda Pasaribu: Sampoerna University, Jakarta
Masripah: Universitas Pembangunan Nasional Veteran Jakarta
Bonnie Mindosa: Institut Bisnis dan Informatika Kwik Kian Gie, Jakarta

Economics and Finance in Indonesia, 2019, vol. 65, 1-19

Abstract: This study investigates board gender diversity in Indonesia’s listed firms and its effect on firm performance from 2011–2016. After addressing the endogeneity of diversity, the results in this paper show that the proportion of female in the boardroom marginally improve firm performance. Firms with two or more female in the boardroom have a stronger impact on firm performance than firms with one female in the boardroom, consistent with the critical mass effect. Finally, certain sectors will gain more benefits of appointing females in the boardroom. The results suggest that increasing gender diversity in the boardrooms can have beneficial effects on firm performance, but the benefits may be subject to the critical mass and firm industry.

Keywords: board diversity; tokenism problem; industry effect (search for similar items in EconPapers)
JEL-codes: G30 G34 J16 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:lpe:efijnl:201901

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