Board gender diversity, competitive pressure and investment efficiency in Chinese private firms

Sultan Sikandar Mirza, Muhammad Ansar Majeed and Tanveer Ahsan
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Sultan Sikandar Mirza: Waikato Management School - Waikato University
Muhammad Ansar Majeed: ZJSU - Zhejiang Gongshang University [Hangzhou]
Tanveer Ahsan: ESC [Rennes] - ESC Rennes School of Business

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Abstract: This study investigates the impact of female directors (FDs) on investment efficiency in a competitive environment. Considering Chinese market, where corporate governance practices are weaker than other developed countries and empirical evidence regarding the role of female directors in shaping investment efficiency is absent, this study fills this gap by studying the role of the female directors in investment efficiency in a competitive environment. The results show that FDs improve the investment efficiency in the firms as they play a monitoring role, discipline the management, reduce agency problem, and improve efficient allocation of resources. The results also exhibit that FDs significantly curb the overinvestment problem. However, FDs do not play a significant role in reducing underinvestment problem. The study facilitates to understand the factors that help in efficient allocation of resources in an economy. This study can be helpful for the policymakers while devising corporate policies to promote and encourage gender diversity in higher management.

Keywords: Competition; Female board of directors; Investment efficiency; Overinvestment; Underinvestment (search for similar items in EconPapers)
Date: 2020-09
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Citations: View citations in EconPapers (6)

Published in Eurasian Business Review, 2020, 10 (3), pp.417-440. ⟨10.1007/s40821-019-00138-5⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02956320

DOI: 10.1007/s40821-019-00138-5

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