Investor Demand for Gender Diversity

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

cara

Topic: Investor Demand for Gender Diversity

Speaker: Cara Vansteenkiste, the University of New South Wales

Venue: Hybrid - Both face to face and online Zoom

On campus | Face-to-face seminar in room CB08.08.002, Building 8, University of Technology Sydney, Australia (Map of campus)

Abstract: We investigate a board gender diversity campaign announcement by Norges Bank Investment Management (NBIM) in February 2021 to show that board gender diversity can affect firm value through an investor demand channel. Exploiting NBIM’s status as the world’s largest sovereign wealth fund, we use the announcement as a shock to investor expectations about board gender diversity. We document significantly positive returns for firms with a female director shortfall, concentrated in firms with low institutional ownership. Consistent with an investor demand view of board gender diversity, these firms experienced a greater increase in ownership by ESG funds and socially responsible investment funds and a greater decrease in their implied cost of capital. Moreover, we find that NBIM’s campaign mobilized different investors relative to campaigns by commercial investors. Our results highlight that board diversity can affect firm value through a discount rate channel, and the unique role of sovereign investors in this process.

Seminar protocols:

  • The seminar will run for 45 minutes, followed by a 15 minute Q&A session
  • There will be a moderator for each seminar event, who will facilitate communication and resolve any issues
  • Participants can raise their hand to ask questions during the presentation. The moderator will then alert the speaker at the appropriate time and either ask the questions raised or they can ask the question directly to the presenter

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Co-ordinator: Jing Xu

Enquiries: Jin Jo

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