Effects of Female Board Representation on the Performance of Listed Companies in New Zealand

Abstract

This study examines the issue of gender diversity on boards of firms listed on the New Zealand Stock exchange (NZX). New Zealand was chosen because it has one of the lowest rates of women on public-company boards in the western world, according to data from the Institute of Directors. In publicly-listed companies in New Zealand, only 17 percent of the board members were women in 2016. A quantile regression approach is used to capture the impact of female representation at different points of the distributions of the performance measure. Using a sample of New Zealand listed companies (NZX) over the period 2005-2016, this study finds insignificant effect of board gender diversity on firm performance over different points of the conditional distribution, and that this impact mostly is indifferent on the measure of performance considered. This result is robust across econometric model – 2SLS that controls for endogenity. The difference-in-difference model is used to verify the significance of robustness of relationships, considering the gender diversity reporting and the financial crisis as exogenous shocks. This study provides empirical evidence on the economic efficacy of the NZX gender reporting rule. The results of this study would be of interest to policy makers, academicians, and practitioners.