Does female representation on corporate boards improve intellectual capital efficiency?
Journal of Intellectual Capital
ISSN: 1469-1930
Article publication date: 24 October 2019
Issue publication date: 28 October 2019
Abstract
Purpose
The purpose of this paper is to analyse the relationship between female representation on corporate boards and intellectual capital (IC) efficiency – while prior studies focus on the relationship between gender diversity and firms’ financial performance.
Design/methodology/approach
Drawing on data from top 500 UK listed firms for 2007–2016 (3,279 firm-years), this study employs an adjusted-value-added intellectual coefficient as a measure of IC efficiency. Further, the two-step system-generalised method of moments has been applied to account for endogeneity issues.
Findings
The results reveal a significant positive relationship between female representation on boards and IC efficiency, including human capital, structural/innovation capital and financial capital efficiency. These results are robust to alternative proxies for the independent variable and difference-in-difference estimation.
Practical implications
The results posit that female representation on boards is associated with IC efficiency, which is vital for firms’ value creation and competitive advantage in the knowledge-economy era. The study also endorses current legislation to increase female representation on corporate boards.
Originality/value
This is among the limited studies to explore the role of female representation on boards in IC efficiency – while most prior studies relate IC efficiency to financial performance.
Keywords
Citation
Nadeem, M., Farooq, M.B. and Ahmed, A. (2019), "Does female representation on corporate boards improve intellectual capital efficiency?", Journal of Intellectual Capital, Vol. 20 No. 5, pp. 680-700. https://doi.org/10.1108/JIC-01-2019-0007
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited