Does the gender composition of local governments matter for firms’ information environment? Evidence from China

Abstract

This study examines whether and how the gender composition of local governments influences the information environment of local firms. The extant economic literature presents a debate on whether policy outcomes of female politicians differ from those of their male counterparts. Using data from prefectural cities in China from 2005 to 2019, we isolate the gender-related impact of female officials on local firms from electoral dynamics and focus on a crucial policy outcome – the information environment of firms. We find a positive relationship between the presence of female officials and the information transparency of local firms. Also, this gender effect intensifies during high corruption periods and in gender-diverse firms but diminishes when national uncertainty is high. Overall, our empirical results contribute to the ongoing debate on gender differences in policy outcomes by supporting the gender differences model that female politicians tend to adopt a gender-specific leadership style in competitive environments.