Abstract
Further recognition of women’s social value and the gradual improvement of women’s economic status have made the proportion of female independent directors on board rise year by year, which has received high attention from academia. Using data of A-share listed companies in Shanghai and Shenzhen stock markets form 2000-2014 in China, this paper investigates the relation among gender diversity, earnings quality and stock price informativeness. As a result, the larger the proportion of female independent directors is, the more firm-specific information the stock price contains. In the meantime, earnings quality of listed companies significantly impact on stock price informativeness, which means that stock prices of companies with higher earnings quality contain more firm-specific information while having other factors controlled. Further studies show that the relation between board gender diversity and stock price informativeness is not simply direct; board gender diversity could raise the stock price informativeness through enhancing earnings quality.
Highlights
Information disclosure is very important for the rational allocation of scarce economic resources and the healthy operation of the whole economic society in the present economic environment
Earnings quality of listed companies significantly impact on stock price informativeness, which means that stock prices of companies with higher earnings quality contain more firm-specific information while having other factors controlled
Further studies show that the relation between board gender diversity and stock price informativeness is not direct; board gender diversity could raise the stock price informativeness through enhancing earnings quality
Summary
Information disclosure is very important for the rational allocation of scarce economic resources and the healthy operation of the whole economic society in the present economic environment. What is the relationship between the quality of the company’s earnings and the information content of the stock price?. Will the increase of the proportion of female directors affect the company’s earnings management, thereby affecting the company’s stock price information content?. The existence of gender differences in the board of directors can increase the information content of stock prices. All. in all, three hypothesis are presented in this paper: 1) The degree of gender diversification of directors can improve the information content of stock prices. 3) The gender diversity of the board of directors will improve the information content of the stock price by improving the quality of the earnings. The larger the proportion of female independent directors is,the more firm-specific information the stock price contains. Earnings quality of listed companies significantly impact on stock price informativeness, which means that stock prices of companies with higher earnings quality contain more firm-specific information while having other factors controlled
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