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Women on boards and bank earnings management: From zero to hero

Women on boards and bank earnings management: From zero to hero
Women on boards and bank earnings management: From zero to hero
We examine how women on boards influence bank earnings management. Using the likelihood of a board appointing women directors based on a Blau index of gender diversity in each director's total employment connections outside our sample banks for identification, we find an inverted U-shaped relation between women on boards and bank earnings management. Specifically, when there exists only a marginal number of women directors, banks are more likely to manipulate earnings. But, when the number of women directors reaches three or more, bank earnings management declines. This inverted U-shaped impact is intensified if women sit on audit or nomination committees, is moderated if women directors have higher education levels and more board experience, and is unchanged during the 2007–2009 financial crisis. Our results hold when we use alternative measures of bank earnings management, employ GMM estimations and test for alternative hypotheses for the inverted U-shaped relation.
0378-4266
Fan, Yaoyao
a339c6e6-59c8-4fab-a63f-43b0d3684fe8
Jiang, Yuxiang
a97a7e0e-8598-4b7e-af60-7dfbc9df2912
Zhang, Xuezhi
38499bdf-521b-4d6e-b97b-1e443b5126e4
Zhou, Yue
1f8cb3b9-0e34-4dd9-862c-e1c7e238d4c7
Fan, Yaoyao
a339c6e6-59c8-4fab-a63f-43b0d3684fe8
Jiang, Yuxiang
a97a7e0e-8598-4b7e-af60-7dfbc9df2912
Zhang, Xuezhi
38499bdf-521b-4d6e-b97b-1e443b5126e4
Zhou, Yue
1f8cb3b9-0e34-4dd9-862c-e1c7e238d4c7

Fan, Yaoyao, Jiang, Yuxiang, Zhang, Xuezhi and Zhou, Yue (2019) Women on boards and bank earnings management: From zero to hero. Journal of Banking & Finance, 107, [105607]. (doi:10.1016/j.jbankfin.2019.105607).

Record type: Article

Abstract

We examine how women on boards influence bank earnings management. Using the likelihood of a board appointing women directors based on a Blau index of gender diversity in each director's total employment connections outside our sample banks for identification, we find an inverted U-shaped relation between women on boards and bank earnings management. Specifically, when there exists only a marginal number of women directors, banks are more likely to manipulate earnings. But, when the number of women directors reaches three or more, bank earnings management declines. This inverted U-shaped impact is intensified if women sit on audit or nomination committees, is moderated if women directors have higher education levels and more board experience, and is unchanged during the 2007–2009 financial crisis. Our results hold when we use alternative measures of bank earnings management, employ GMM estimations and test for alternative hypotheses for the inverted U-shaped relation.

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More information

Accepted/In Press date: 6 August 2019
e-pub ahead of print date: 6 August 2019
Published date: October 2019

Identifiers

Local EPrints ID: 445412
URI: http://eprints.soton.ac.uk/id/eprint/445412
ISSN: 0378-4266
PURE UUID: e50e172d-7cb5-456a-9c50-ec9203b31811
ORCID for Yue Zhou: ORCID iD orcid.org/0000-0001-6544-2078

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Date deposited: 08 Dec 2020 17:30
Last modified: 28 Apr 2022 02:31

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Contributors

Author: Yaoyao Fan
Author: Yuxiang Jiang
Author: Xuezhi Zhang
Author: Yue Zhou ORCID iD

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