Gender Diversity on Board and Stock Market Liquidity: Empirical Evidence from the French Market

Abstract

This study examines whether and how female board directors may affect stock market liquidity. The empirical analysis is drawn on a sample of 81 firms listed on the SBF 120 between 2002 and 2012. The paper considers several measures of liquidity and gender diversity. To assess the quality of corporate governance we rely on five scores on board structure, board function, compensation policy, shareholder rights, and vision and strategy. Our results provide evidence that gender diversity has no significant effect on stock liquidity. In addition, the presence of female directors on board seems to be explained by (1) the presence of women on boards in the past year, (2) the adoption of International financial reporting standards (IFRS) and (3) the listing on US markets.However, in several regressions, the number of female independent and non-executive directors increases when the firm displays several illiquidity issues. Finally, we figure out that firms with good corporate governance have more gender-diverse boards but the presence of female directors does not depend on the quality of governance.