Threshold effects of board gender diversity on firm performance: panel smooth transition regression model

Sami Gharbi · Hidaya Othmani

52 citations0/0 files storedCorporate Governance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Gender Diversity and Inequality Corporate Finance and Governance Gender Politics and Representation

Abstract

Purpose This study aims to investigate whether threshold effects exist in the relationship between board gender diversity and firm performance. Design/methodology/approach This study applies the panel smooth threshold regression model (PSTR) to a sample of 284 non-financial French firms listed on Euronext Paris over the period 2009–2017. Firm performance proxies are Tobin’s Q and return on assets (ROA). The board gender diversity is measured by the percentage of women participation in board. Findings Threshold effects in the relationships between board gender diversity and firm performance measures are found. For Tobin’s Q, the model has one threshold at the 34.17% of women directors’ appointment on boards. Similarly, for ROA, the model has one threshold at the 38.28% of women presence in the board. The results show that above the estimated threshold, women directorship has a positive impact on firm performance. However, below the threshold, there is a neutral relationship. The findings support the critical mass view that a minimum of one third women representation in board is compulsory to achieve the desired effect of gender diversity. Practical implications This study’s finding provides useful insights to managers, investors and policymakers. Managers and investors can identify the adequate board gender diversity levels that enhance firm performance. Policymakers are divided on whether mandatory or voluntary board gender quota should be adopted. This study suggests that a quota of one third can be used in policy implementation. Originality/value Unlike prior studies that consider the relationship between firm performance and board gender diversity as linear, to the best of the authors’ knowledge, this study is the first to investigate the threshold effects in this relationship using a new econometric approach.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 52 citations exist upstream.

References

1983Separation of Ownership and Control 1988Testing for a Unit Root in Time Series Regression 2002Unit root tests in panel data: asymptotic and finite-sample properties 1980Agency Problems and the Theory of the Firm 2009Women in the boardroom and their impact on governance and performance☆1999Threshold effects in non-dynamic panels: Estimation, testing, and inference 1977Some Effects of Proportions on Group Life: Skewed Sex Ratios and Responses to Token Women 1991The Effects of Board Composition and Direct Incentives on Firm Performance

Cited by

2025Board gender diversity and firm performance: Unveiling the ESG effect 2024Association between anaesthesia–surgery team sex diversity and major morbidity 2023Two decades of research on board gender diversity and financial outcomes: Mapping heterogeneity and future research agenda 2023Women on boards, firm earnings management (EM) and performance nexus: does gender diversity moderate the EM–performance relationship?2024Board gender diversity and bank performance in Jordan

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.