Gender diversity and acquisitions: How female directors add value in acquisition decisions

Article

Shams, Syed, Minnick, Kristina, Khedmati, Mehdi and Gunaskerage, Abeyratna. 2024. "Gender diversity and acquisitions: How female directors add value in acquisition decisions." Journal of Business Finance and Accounting. 51 (1-2), pp. 113-147. https://doi.org/10.1111/jbfa.12688
Article Title

Gender diversity and acquisitions: How female directors add value in acquisition decisions

ERA Journal ID19531
Article CategoryArticle
AuthorsShams, Syed, Minnick, Kristina, Khedmati, Mehdi and Gunaskerage, Abeyratna
Journal TitleJournal of Business Finance and Accounting
Journal Citation51 (1-2), pp. 113-147
Number of Pages35
Year2024
PublisherJohn Wiley & Sons
Place of PublicationUnited Kingdom
ISSN0306-686X
1468-5957
Digital Object Identifier (DOI)https://doi.org/10.1111/jbfa.12688
Web Address (URL)https://onlinelibrary.wiley.com/doi/full/10.1111/jbfa.12688
Abstract

We investigate board gender diversity and acquisition performance. Greater gender diversity promotes value-enhancing acquisitions. Utilizing an external shock to board composition, we determine whether and why an increase in female directors adds value. Female directors have unique characteristics relative to their male counterparts that contribute to their ability to add value during the merger and acquisition process. The positive market reaction following an acquisition is rationalized by better deal terms, monitoring around the acquisition and post-merger performance. The extensive professional networks and unique backgrounds female directors possess are the underlying mechanisms contributing to acquisition decisions' success.

Keywordsacquisition announcement returns, corporate governance, gender diversity, mergers and acquisitions
ANZSRC Field of Research 2020350202. Finance
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Byline AffiliationsSchool of Business
Bentley University, United States
Monash University
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