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Do women in top management affect firm performance?A panel study of 2,500 Danish firms

Nina Smith (Aarhus School of Business, Aarhus, Denmark)
Valdemar Smith (Aarhus School of Business, Aarhus, Denmark)
Mette Verner (Aarhus School of Business, Aarhus, Denmark)

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Article publication date: 1 October 2006

16666

Abstract

Purpose

This paper aims to examine the relationship between management diversity and firm performance in the case of women in top executive jobs and on boards of directors. Corporate governance literature argues that board diversity is potentially positively related to firm performance. This hypothesis is tested in the paper.

Design/methodology/approach

In this paper with the use of data for the 2,500 largest Danish firms observed during the period 1993‐2001 various statistical models for firm performance are specified and estimated. The main focus in the models is the estimated relationship between the proportion of women in top management (CEOs and on boards of directors) and firm performance.

Findings

The results in this paper show that the proportion of women in top management jobs tends to have positive effects on firm performance, even after controlling for numerous characteristics of the firm and direction of causality. The results show that the positive effects of women in top management strongly depend on the qualifications of female top managers.

Originality/value

This paper provides solid statistical evidence of the effects of women in top management on firm performance. The use of a large sample and the panel nature of the data set make it possible to properly control for direction of causality and, furthermore, much firm and individual information is included to estimate genuine effects of women in top management.

Keywords

Citation

Smith, N., Smith, V. and Verner, M. (2006), "Do women in top management affect firm performance?A panel study of 2,500 Danish firms", International Journal of Productivity and Performance Management, Vol. 55 No. 7, pp. 569-593. https://doi.org/10.1108/17410400610702160

Publisher

:

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

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