Gender diversity and firm performance: evidence from Nigeria

Musa, Maryam

Abstract

The study examines the effect of gender diversity on firm performance. Gender diversity is considered an important corporate governance mechanism, especially in developing countries like Nigeria because of weak external governance laws, strong cultural and religious factors entrenching the glass ceiling phenomenon, and the absence of extant legislation on quotas for female representation. This thesis filled the important research gap by examining the relationship between gender diversity on firm performance. Unlike previous studies on the business case for gender diversity which predominantly use the absolute number of female board members in corporate boards, this work takes a different approach by examining the governance channels and female board members’ attributes that promote firm performance. The study’s theoretical framework draws extensively from agency theory, resource dependency theory, stewardship theory, and stakeholder theory in formulating the five hypotheses of the study. The first hypothesis adopted the traditional framework of absolute number of female board members. The second and third hypotheses considered the governance channels -female attendance to board meetings and female representation on board committees , while the fourth and fifth hypotheses considered female board members attributes - educational qualification and nationalities of female board members. Return on asset and Tobin’s Q are the proxies of firm performance. The five hypotheses were tested using a longitudinal sample of 118 firms over eighteen years from 2002 to 2019. This research’s sample is all quoted firms on the Nigerian Stock Exchange. Firms in the financial sector were excluded from the sample. The five hypotheses were analysed using the static panel and dynamic Generalised Method of Moments (GMM). The study's findings revealed that gender, female educational qualifications, female representation on board committees, and female attendance to board meetings are positive and significant predictors of firm performance. The results also provide inconclusive evidence on the effect of gender nationality (foreign female board members) on firm performance. The findings of the study make significant contributions in the following ways: (1) The approach of focusing on Nigeria offers a new insight into the performance of female board members in a jurisdiction without explicit legislation on quota for female representation in corporate boards. The use of non-financial industries also provides an insight on the performance of female board members in sectors that are not heavily regulated; (2) improve the advocacy of narrowing the gender gap in the corporate boardroom by identifying gender attributes explicit legislation on gender quota would consider as well as providing clarity on the governance channels through which female board member promotes firm performance (3) contributes to governance literature by revealing that the appointment of educated women and foreign female board members are crucial for attracting women that possess unique skills, leadership qualities, social intelligence, technical intelligence, mastering of the corporate environment, managerial resilience, and emotional intelligence ; (4) the relevance of institutional peculiarities in the superiority of market-based versus accounting-based measures of firm performance debate. The accounting-based measure performed better due to the level of market development in Nigeria. Generally, the finding of this research contributes to the gender diversity and firm performance debate by shifting the analytical focus to the corporate governance channels and gender attributes that drive performance. This unique approach is expected to stimulate further research that adopts the contingency approach of identifying the transmission channels of gender diversity and firm performance debate.

Citation

Musa, M. (2023). Gender diversity and firm performance: evidence from Nigeria. (Thesis). The University of Salford

• Thesis Type: Thesis
• Deposit Date: Aug 3, 2023
• Publicly Available Date: Oct 30, 2023
• Award Date: Sep 29, 2023