Gender Diversity and Economic Efficiency: Reducing Information Asymmetry through Women on Boards

Authors

  • Dr. Zoya Wajid Satti Assistant professor, SZABIST University, Islamabad Author
  • Dr. Nasir Munir Assistant professor, SZABIST University, Islamabad Author
  • Javeria Tariq Phd Scholar, Muslim Youth University Islamabad Author
  • Muhammad Omair Khan Phd Scholar, Muslim Youth University Islamabad Author
  • Hamiyat Yab Phd Scholar, COMSATS University Islamabad, Attock Author

DOI:

https://doi.org/10.59075/h8hsaz42

Keywords:

Sustainable Development, Board Diversity, Information Asymmetry, Market Transparency, Economic Efficiency

Abstract

Corporate boards are increasingly becoming diverse, with women playing pivotal roles in shaping governance practices and economic outcomes. This study investigates the impact of women on corporate boards (WOB) on reducing information asymmetry—a persistent issue in financial markets that affects investment decisions and corporate valuation. Using a panel dataset comprising 240 non-financial firms listed on the Shanghai and Shenzhen Stock Exchanges over 2008–2023, the study integrates insights from stakeholder and agency theories to explore how board diversity influences information transparency. This research analyzes the impact of WOB on information asymmetry, with CSR and analyst coverage serving as moderating factors. The study indicates that the presence of female directors on organizational boards enhances governance structures, as these organizations demonstrate elevated levels of corporate social responsibility (CSR) and garner increased analyst attention, thereby mitigating information asymmetry and fostering trust among stakeholders. This research examines the beneficial effects of board diversity from an economic and governance standpoint within organizations, particularly in the Chinese market, where transitional institutional structures present both challenges and opportunities. Consequently, the study addresses the intersection of gender diversity, corporate social responsibility, and analyst coverage, providing valuable insights for policymakers, investors, and management seeking to improve market efficiency and economic equity. The findings endorse the significance of employing inclusive governance as a mechanism for cost reduction and enhancing the accountability of major corporations while fostering sustainable development.

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Published

2025-01-14

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