Abstract
PurposeThe purpose of this paper is to analyse the relationship between female representation on corporate boards and intellectual capital (IC) efficiency – while prior studies focus on the relationship between gender diversity and firms’ financial performance.Design/methodology/approachDrawing on data from top 500 UK listed firms for 2007–2016 (3,279 firm-years), this study employs an adjusted-value-added intellectual coefficient as a measure of IC efficiency. Further, the two-step system-generalised method of moments has been applied to account for endogeneity issues.FindingsThe results reveal a significant positive relationship between female representation on boards and IC efficiency, including human capital, structural/innovation capital and financial capital efficiency. These results are robust to alternative proxies for the independent variable and difference-in-difference estimation.Practical implicationsThe results posit that female representation on boards is associated with IC efficiency, which is vital for firms’ value creation and competitive advantage in the knowledge-economy era. The study also endorses current legislation to increase female representation on corporate boards.Originality/valueThis is among the limited studies to explore the role of female representation on boards in IC efficiency – while most prior studies relate IC efficiency to financial performance.
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