Pleased to share that my recent co-authored research with Dr Dharmendra Naidu reached an important milestone of 1000 views! Thank you, God, for everything. Thank you to Abacus for publishing our research and to the public for interest in our research. Congratulations Dr Dharmendra Naidu!
Our research is entitled, "Do Investors Undervalue Female Directors due to Gender Role Stereotypes? Evidence from the United States". Our research is available as open access using the link below.
Open Access Research Paper: https://doi.org/10.1111/abac.12321
Co-authors: Dr Kumari Ranjeeni and Dr Dharmendra Naidu
Abstract
We show that female directors are associated with higher equity undervaluation after controlling for the effects of female managers, firm performance, corporate governance, risk, dispersion in analysts’ earnings forecasts, firm size, stock price informativeness, and earnings quality. This association is less pronounced after increased societal awareness of female directors. Our findings are robust to the use of alternative measures of key variables and various tests of endogeneity. We further find that female directors’ committee membership, committee chair role, board tenure, and board experience are positively associated with equity undervaluation. Additional results show that female directors’ age and ethnicity also impact equity undervaluation, and the undervaluation of female directors mostly occurs for firms operating in male-dominated industries. Our results collectively suggest that investors’ negative gender role stereotyping of female directors contributes to equity undervaluation of firms with female directors. Negative stereotyping of female directors is less pronounced after investors become more aware of the benefits of female directors. Therefore, our findings provide insights for policy makers and suggests that further increased awareness of the benefits of female directors is essential. Policy makers may also consider taking appropriate actions to further minimize gender stereotyping of female directors.
Reference:
Ranjeeni, K., & Naidu, D. (2024). Do Investors Undervalue Female Directors Due to Gender Role Stereotypes? Evidence from the United States. Abacus. Open Access. https://doi.org/10.1111/abac.12321.
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