Female directors on the board and investment efficiency: evidence from Korea
Young Zik Shin (),
Jeung-Yoon Chang (),
Kyeongmin Jeon () and
Hyunpyo Kim ()
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Young Zik Shin: Sungkyunkwan University
Jeung-Yoon Chang: Sungkyunkwan University
Kyeongmin Jeon: Sungkyunkwan University
Hyunpyo Kim: Shippensburg University of Pennsylvania
Asian Business & Management, 2020, vol. 19, issue 4, No 3, 438-479
Abstract We investigate whether female board representation affects investment efficiency at Korean publicly traded companies from 2006 to 2014. We find a positive association between female directorship and investment efficiency. For a subsample of firms that are classified into over- and under-investment groups, we find that the subsample of firms with female directors is less likely to over-invest compared to the group without female directors. This implies that female directors’ risk-aversion, conservatism, and prudence affect investment efficiency by reducing over-investment rather than reducing under-investment. Other robustness tests corroborate our conclusion that female directors help to improve investment efficiency.
Keywords: Female director; Corporate governance; Investment efficiency; Over-investment (search for similar items in EconPapers)
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