Women in top management and agency costs

This study investigates gender diversity among the top managers of Fortune 500 firms and its effect on agency costs. The study finds that firms with a greater percentage of female officers present lower agency costs but that the negative relation is not robust when considering the endogeneity of div...

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Bibliographic Details
Published in:Journal of business research 2011-02, Vol.64 (2), p.180-186
Main Authors: Jurkus, Anthony F., Park, Jung Chul, Woodard, Lorraine S.
Format: Article
Language:English
Subjects:
Agency
Agency costs
Competitive product market
Competitiveness
Corporate governance
Cost analysis
Female officers
Firm performance
Gender diversity
Gender diversity Female officers Agency costs Corporate governance Firm performance Competitive product market
Senior management
Studies
Upper management
Women
Women's participation
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Summary:This study investigates gender diversity among the top managers of Fortune 500 firms and its effect on agency costs. The study finds that firms with a greater percentage of female officers present lower agency costs but that the negative relation is not robust when considering the endogeneity of diversity. The study also finds that external governance influences the relationship. Although increasing diversity does not reduce agency costs for all firms, the evidence shows that diversity is significantly negatively related to agency costs in firms in less competitive markets. The results suggest that increasing diversity in management can have beneficial effects for firms where strong external governance is absent.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2009.12.010