Firm life cycle, asset preferences, and financial performance: Does gender diversity matter?

Abstract

Objective: This study examines the moderating role of gender diversity in the relationship between asset preferences and firm performance over the firm life cycle. Methods: Panel regression analysis is used to analyse 2008–2019 data of the S&P 500 firms. Results: Results show that gender diversity significantly moderates the relationship between asset preferences and firm performance. Second, this relationship varies across different life cycle stages of the firm. Third, women on board influence this relationship more in the introduction, maturity, and shakeout stages, while female executives have more influence in the introduction and maturity stages. Fourth, gender diversity enhances asset preferences with firm performance but reverses the relationship with many asset categories. Lastly, gender diversity positively moderates firm size relationship with maturity and shakeout stage performance while negatively moderates firm size in the introduction stage. Conclusion: This study has practical implications for firms that diversify their board and management structure to improve performance.