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Gender, Legal Origin, and Accounting Disclosure: Evidence from More Than 140,000 Firms

Olayinka Oyekola, Olapeju Ogunmokun, Martha Omolo and Samuel Odewunmi
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Olapeju Ogunmokun: Faculty of Business and Law, De Montfort University
Martha Omolo: Department of Economics, University of Exeter
Samuel Odewunmi: Department of Economics, University of Exeter

No 2313, Discussion Papers from University of Exeter, Department of Economics

Abstract: We explore the hypothesis that the gender of a firm's manager and a country's legal origin are important factors influencing whether or not firms hire external auditors to prepare their financial statements. International evidence from 140,860 unique firms surveyed in 139 countries over the period 2008-2022 offers significant support for our hypothesis. In particular, our results suggest that: (1) the probability of female-managed firms producing externally audited financial statements is 1.42 percentage points (or 0.03 standard deviation) lower than their male-managed counterparts; (2) the probability of producing externally audited financial statements by firms in common law origin countries is 7 percentage points (or 0.14 standard deviation) higher than for firms located in civil law origin countries; and (3) the lower frequency with which female-managed firms in our sample report audited financial statements is exacerbated when the firms are located in a common law country. We verify that these results are robust with respect to a number of other considerations, including endogeneity issues, alternative proxies for key variables, additional confounding factors, and potential outliers. Our results contribute to the literature on the relationships between manager characteristics, firm disclosure, and country legal environment.

Keywords: gender; legal origin; accounting disclosure (search for similar items in EconPapers)
Date: 2023-10-14
New Economics Papers: this item is included in nep-acc, nep-gen and nep-law
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