Publication Type
Working Paper
Version
publishedVersion
Publication Date
2-2022
Abstract
We revisit the value implications of female representation on boards by exploiting the board diversity campaign announcement by Norges Bank Investment Management (NBIM)—the world’s largest sovereign wealth fund. In February 2021, NBIM required its portfolio firms to have at least 30% female directors. Using NBIM’s announcement as a shock to investor expectations about female board representation, we document significantly positive returns for firms with a female director shortfall, concentrated in firms with low institutional ownership. Consistent with an investor demand view of board gender diversity, we find that these firms experienced a greater increase in ownership by socially responsible institutional investors and a greater decrease in their implied cost of capital following the announcement. Our results indicate that the documented positive valuation effects of gender diversity can be explained by a discount rate channel.
Keywords
board gender diversity, institutional investors, investor demand, sustainable investing
Discipline
Finance and Financial Management | Strategic Management Policy
Research Areas
Strategy and Organisation
First Page
1
Last Page
60
Identifier
10.2139/ssrn.4023775
Publisher
European Corporate Governance Institute - Finance Working Paper
Citation
LIANG, Hao and VANSTEENKISTE, Cara.
Delegated gender diversity. (2022). 1-60.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7145
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
External URL
https://ssrn.com/abstract=4023775
Additional URL
https://doi.org/10.2139/ssrn.4023775