Literature Review Women on boards and in TMTS and firm performance44 2 3 2 Research methodology and operationali zation of variables The majority of papers that investigate the rela tionship between diversity and performance are cross sectional or panel data studies The domi nant research methodology applied is regression analysis The independent variable female representation gender diversity in upper echelons is operationa lized by different indicators Most studies measure gender diversity by more than one indicator The percentage of women on corporate boards exe cutive boards top management teams is used as independent variable in 30 cases 17 studies apply dummy variables for the presence of one or more woman on the board women on the executive board a female CEO or women in top manage ment Nine studies make use of the heterogeneity index developed by Blau 1977 one additionally of the Shannon 1948 index recognized indices for measuring the level of gender diversity in ma nagement teams The vast majority of studies applies a combination of different performance measures for operationa lization of the dependent variable Accounting ba sed performance measures are backward looking whereas market based measures are future orien ted The mostly used accounting based performan ce measure is return on assets ROA ROA is an indicator for management s efficiency in genera ting earnings by using its assets and constitutes the relevant dependent variable in 26 studies Tobin s Q is the mostly used market based performance measure 18 of the studies under review choose Tobin s Q or approximations to it such as the mar ket to book ratio which divides the equity s market value by its book value in order to capture the market valuation of the firm For the calculation of Tobin s Q the total market value is divided by the total value of the assets A high Tobin s Q ratio indicates overvaluation whereas a low ratio implies undervaluation Carter et al 2003 are the first to focus on both performance indicators Overall 13 studies use both ROA and Tobin s Q for their analyses e g Adams Ferreira 2009 Bøhren Strøm 2010 Dobbin Jung 2011 Gregory Smith Main O Reilly 2014 Other frequently applied accounting based measures include return on equi ty ROE return on investment ROI return on sa les ROS or employee productivity e g operating revenue per employee value added per emplo yee An alternative figure applied to capture the market s perception of the company s performance is the total shareholder return TSR considering stock price changes and dividends paid The effects of female board representation are also investigated by setting the focus on external firm valuation Event study methodology using time series is used in order to analyze the short term stock market reaction to the appointment of fe male directors and a multiple regression approach to assess the long term influence on firm value This approach is applied for instance by Farrell and Hersch 2005 Lee and James 2007 Francoeur Labelle and Sinclair Desgagné 2008 or Campbell and Minguez Vera 2010 A quarter of the papers 11 in the present survey use short term abnormal stock returns following company specific announ cements average monthly abnormal returns or long term stock returns in order to measure gender diversity effects on firm value and thus shareholder wealth Ahern and Dittmar 2012 use the appro ach of a natural experiment setting 2 3 3 The issue of endogeneity A central problem that occurs in most corporate governance studies is endogeneity Roberts and Whited 2012 devote an extensive survey to the Women on boards and in TMTs and firm performance

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 44
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