Women in top management and agency costs

• Published in: Journal of business research Vol. 64; no. 2; pp. 180 - 186
• Main Authors: Jurkus, Anthony F., Park, Jung Chul, Woodard, Lorraine S.
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01.02.2011; Elsevier; Elsevier Sequoia S.A
• Series: Journal of Business Research
• Subjects: Agency; Agency costs; Competitive product market; Competitiveness; Corporate governance; Cost analysis; Female officers; Firm performance; Gender diversity; Gender diversity Female officers Agency costs Corporate governance Firm performance Competitive product market; Senior management; Studies; Upper management; Women; Women's participation; Firm performance; Gender diversity; Agency costs; Corporate governance; Competitive product market; Female officers
• ISSN: 0148-2963; 1873-7978
• DOI: 10.1016/j.jbusres.2009.12.010

This study investigates gender diversity among the top managers of Fortune 500 firms and its effect on agency costs. The study finds that firms with a greater percentage of female officers present lower agency costs but that the negative relation is not robust when considering the endogeneity of diversity. The study also finds that external governance influences the relationship. Although increasing diversity does not reduce agency costs for all firms, the evidence shows that diversity is significantly negatively related to agency costs in firms in less competitive markets. The results suggest that increasing diversity in management can have beneficial effects for firms where strong external governance is absent.