The effect of gender diversity in the board of directors on the merger and acquistion activity of European listed firms
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2019-08-02
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en
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Gender diversity in corporate boards has become an increasing topic in Europe. European policymakers are
trying to diversify the board of directors of firms for a better representation of female directors in top
functions. This study explores the role of gender diversity in the board on the merger and acquisition
activity of the firm, by focusing on the bid initiations of the firm and the bid premium paid by the acquirer.
Many M&A deals are value decreasing instead of value enhancing. One of the main reasons for this is the
greedy, overconfident and risky behaviour of directors during the M&A process. These behavioural
characteristics can be seen as masculine. The question that comes up to mind is if the representation of
female directors in the board could influence the merger and acquisition activity of the firm? Using data of
276 M&A deals for European publicly listed firms during 2003-2017, we found a significant negative effect
of gender diversity on the probability of doing a bid. Moreover, we found a negative effect of gender
diversity on the size of the bid premium paid by the acquirer.
Keywords: mergers and acquisition, gender diversity, bid initiations, bid premium
Max van
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Faculteit der Managementwetenschappen