The impact of female board representation on corporate acquisitiveness in Europe

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2020-11-26
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en
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This study investigates whether women in boardrooms influence the acquisitiveness of European firms. Using a sample of 45,932 firm-year observations from 2,821 publicly listed companies during the period 1999 – 2019, it is found that board gender diversity does not significantly influence a firm’s acquisitiveness. This result is robust to two alternative measures of corporate acquisitiveness as well as to various sub-samples and does not support the claim that women tend to be less overconfident and more risk-averse than men. However, when low value deals are excluded, it is found that a 10% increase in the proportion of female directors significantly decreases the number of acquisition deals by 5.45%. It is also demonstrated that a 10% increase in the tenure of female relative to male directors significantly decreases the number of acquisition deals by 2.87%. No significant difference in corporate acquisitiveness is found between firms with and without at least 30% or 3 female directors. Hence, no support is found for the critical mass theory in either relative or absolute terms for women on corporate boards. Finally, it is demonstrated that firms with at least one female director are associated with 4.53% less acquisition deals. Keywords: mergers and acquisitions, corporate acquisitiveness, board gender diversity, female directors, overconfidence, risk-aversion, critical mass theory, social identity theory
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Faculteit der Managementwetenschappen