Gender diversity and firm performance - Evidence from listed companies in Ho Chi Minh Stock Exchange - Vietnam
Abstract
There have been many studies conducted to examine the relationship between gender diversity and firm performance in developed markets. However, in the context of emerging markets, there still remains unclear evidence about how the diversity in board of directors influences on financial firm performance. Thus, this thesis aims to investigate the relationship between gender diversity and firm performance measured by Tobin’s Q, return on assets (ROA) and return on equity (ROE) of an underdeveloped governance mechanism such as Vietnam system.
Using a sample of 100 listed companies with the largest market capitalization on Hochiminh stock exchange, the panel data analysis method was employed. The results show that there is a positive relationship between gender diversity and firm performance measured by return on assets (ROA). On the other hand, gender diversity is negatively linked with Tobin’s Q and has no relationship with return on equity (ROE).
Our findings suggested that having more women in the board of directors, the firm tends to use its asset more effective, thus contribute better to the firm performance. However, the market does not value the proposition of having women in the board of directors. Therefore, corporations in Vietnam should consider to allocate the number of women in board of director to ensure they contribute to the outperformance of the firm.