Financial performance and risk behavior of gender-diversified boards in the Chinese automotive industry: initial insights
Horak, S., & Cui, J. (2017). Financial performance and risk behavior of
gender-diversified boards in the Chinese automotive industry: initial insights.
Personnel Review, 46(4), 847-866. DOI: 10.1108/PR-10-2015-0274
Link:
https://doi.org/10.1108/PR-10-2015-0274
Abstract
Purpose: Recent legislation in Europe and North America encourages women’s
participation in corporate boards based on the belief that gender-diversified
boards contribute positively to firm performance and increased competitiveness.
Contrary to the West, the women’s participation rate in business has been
traditionally high in China. Our main research aim is to find out whether
gender-diverse corporate boards of Chinese automotive firms perform better
financially than gender-homogeneous boards.
Design/methodology/approach: By drawing on data from the Chinese Government and
Bloomberg, we compare and analyze the differences in financial performance
(return on equity, asset growth, sales growth) and risk behavior (debt risk, R&D
expenditure) of Chinese automotive firms with and without women on their
corporate board.
Findings: We find significant evidence that firms with women on the board
perform better across all three categories, with the exception of return on
equity, for which we found no significant differences among the firms analyzed.
Practical implications: While women’s participation in corporate boards in China
is low, the results of this study suggest to policy makers and firms alike to
implement measures that support gender-diversified boards in order to take
advantage of their potential to increase corporate performance.
Originality/value: So far, the performance of corporate boards of countries with
a traditionally high share of female participation in the workforce has rarely
been analyzed. Research focusing on the Chinese automotive industry is new and
under-represented, although China is the largest automotive market worldwide and
a key industry of the domestic economy. This investigation contributes to the
literature stream on board diversity in as well as to industry-related studies.
With the example of the Chinese automotive industry, it provides empirical
evidence of better performance of firms with gender-diversified boards within
the categories tested.
Keywords
Corporate Governance, Diversity Management, Gender in Management, Corporate
Boards, Automotive Industry, China