Does board gender diversity weaken or strengthen executive risk-taking incentives?

We investigate the effect of board gender diversity on managerial risk-taking incentives. Our results demonstrate that companies with stronger board gender diversity provide more powerful executive risk-taking incentives. It appears that female directors' risk aversion exacerbates managers'...

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Autores principales:	Pattanaporn Chatjuthamard, Pornsit Jiraporn, Sang Mook Lee
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/fcb2a9db679c48a0b0b33b60b309965a
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spelling	oai:doaj.org-article:fcb2a9db679c48a0b0b33b60b309965a2021-12-02T20:17:06ZDoes board gender diversity weaken or strengthen executive risk-taking incentives?1932-620310.1371/journal.pone.0258163https://doaj.org/article/fcb2a9db679c48a0b0b33b60b309965a2021-01-01T00:00:00Zhttps://doi.org/10.1371/journal.pone.0258163https://doaj.org/toc/1932-6203We investigate the effect of board gender diversity on managerial risk-taking incentives. Our results demonstrate that companies with stronger board gender diversity provide more powerful executive risk-taking incentives. It appears that female directors' risk aversion exacerbates managers' risk aversion, resulting in a sub-optimal level of risk-taking. To offset this tendency for too little risk, companies are induced to provide stronger risk-taking incentives. Specifically, an increase in board gender diversity by one standard deviation raises vega by 10.3%. Further analysis corroborates the results, including propensity score matching, entropy balancing, and an instrumental-variable analysis. Endogeneity appears to be unlikely, suggesting that female directors are not merely associated with, but probably bring about stronger risk-taking incentives.Pattanaporn ChatjuthamardPornsit JirapornSang Mook LeePublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 10, p e0258163 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Pattanaporn Chatjuthamard Pornsit Jiraporn Sang Mook Lee Does board gender diversity weaken or strengthen executive risk-taking incentives?
description	We investigate the effect of board gender diversity on managerial risk-taking incentives. Our results demonstrate that companies with stronger board gender diversity provide more powerful executive risk-taking incentives. It appears that female directors' risk aversion exacerbates managers' risk aversion, resulting in a sub-optimal level of risk-taking. To offset this tendency for too little risk, companies are induced to provide stronger risk-taking incentives. Specifically, an increase in board gender diversity by one standard deviation raises vega by 10.3%. Further analysis corroborates the results, including propensity score matching, entropy balancing, and an instrumental-variable analysis. Endogeneity appears to be unlikely, suggesting that female directors are not merely associated with, but probably bring about stronger risk-taking incentives.
format	article
author	Pattanaporn Chatjuthamard Pornsit Jiraporn Sang Mook Lee
author_facet	Pattanaporn Chatjuthamard Pornsit Jiraporn Sang Mook Lee
author_sort	Pattanaporn Chatjuthamard
title	Does board gender diversity weaken or strengthen executive risk-taking incentives?
title_short	Does board gender diversity weaken or strengthen executive risk-taking incentives?
title_full	Does board gender diversity weaken or strengthen executive risk-taking incentives?
title_fullStr	Does board gender diversity weaken or strengthen executive risk-taking incentives?
title_full_unstemmed	Does board gender diversity weaken or strengthen executive risk-taking incentives?
title_sort	does board gender diversity weaken or strengthen executive risk-taking incentives?
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/fcb2a9db679c48a0b0b33b60b309965a
work_keys_str_mv	AT pattanapornchatjuthamard doesboardgenderdiversityweakenorstrengthenexecutiverisktakingincentives AT pornsitjiraporn doesboardgenderdiversityweakenorstrengthenexecutiverisktakingincentives AT sangmooklee doesboardgenderdiversityweakenorstrengthenexecutiverisktakingincentives
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Does board gender diversity weaken or strengthen executive risk-taking incentives?

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