The Role of Gender Diversity in Downside Risk: Empirical Evidence from Vietnamese Listed Firms

Cong-Duc Tran,Minh-Tuan Phung,Fu-Ju Yang,Yi-Hsien Wang

doi:10.3390/math8060933

Abstract

Corporate governance has been marked as an important component of the fast-growing pace of the Vietnam economy recently. Aligning with the concern that gender plays a critical role in corporate management, this study aims to reveal the entire benefits of the appearance of women on board to reduce downside risk in the frontier countries. By using a unique dataset from Vietnamese listed firms and appropriate econometric methods, we present tight results that the presentation of women at firm management level is more likely to lessen the downside risk. In particular, female non-senior reduces all risk attributes, whereas the presence of women in executive board decrease firm risk only. Furthermore, the decreasing of individual and systemic risk are additionally driven by female Chief Executive Officer (CEO) and chairman. We found strong evidence that female leadership may decrease risk-taking in the low-risk firms at all managerial levels but not in the case of a female CEO. In summary, by examining data from specific frontier areas such as Vietnam, we confirm that the role of female leadership in terms of reducing the downside risk depend on their power managerial levels and the firm-risk behavior.

Highlights

IntroductionAsian economics that implicates an increase in pressure on corporate governance for firm managers
The twenty-first century has been marked as the most glorious period for the massive growth ofAsian economics that implicates an increase in pressure on corporate governance for firm managers.Among them, gender equality in the boardroom has been raised as one of the concerns that impact corporate risk-taking [1]
We consider compositing of three risk attributes which are measured by parametric-based value at risk (VaR) and expected shortfall

Summary

Introduction

Asian economics that implicates an increase in pressure on corporate governance for firm managers. Gender equality in the boardroom has been raised as one of the concerns that impact corporate risk-taking [1]. Gender equality in the board is noticed as the main factor in corporate governance that improves firm performance [2]. As the weakness of internal corporate governance leads to the increase in agency cost, it is mentioned as the root of the recent financial crisis [4,5]. The firm with good corporate governance is expected to perform better due to the lower cost capital and default risk [6]. With the importance of corporate governance in protecting shareholders from undesirable downturn of stock market, the board

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