CEO gender, boardroom participation with endogenous decisions and firm productivity
Segundo Camino-Mogro, Mary Armijos-Yambay, Grace Armijos-BravoPurpose
This paper examines whether female leadership captured by having a female chief executive officer (CEO) and greater women’s participation in the boardroom is associated with higher firm productivity in Ecuador, a context without mandatory private-sector board gender quotas.
Design/methodology/approach
We estimate a production function using the Gandhi et al.’s (2020) estimator. In this framework, CEO gender and female board participation are included as lagged firm-level leadership variables that may be associated with the evolution of future productivity rather than as simple contemporaneous controls. We also use matching techniques as complementary diagnostic exercises to assess whether the estimated associations are driven by observable differences across firms or by short-run productivity changes around CEO-gender transitions.
Findings
Our estimates show a positive association between female CEOs and firm productivity. This association is stronger in the services sector. By firm size, the results suggest that small, medium and large firms led by female CEOs display higher productivity, except in the natural resources sector. Similar patterns are found when female participation in the boardroom is analyzed. We also show that CEO tenure is more strongly associated with productivity among female CEOs than among male CEOs. However, the difference in difference matching (DDM) analysis does not provide evidence of short-run productivity changes following simultaneous CEO and CEO-gender transitions.
Practical implications
The findings suggest that women’s access to CEO and board positions is relevant for discussions on corporate governance, leadership pipelines and talent retention. However, the results should be interpreted as conditional associations rather than causal evidence that increasing female leadership automatically improves productivity. Since the estimated relationships vary across sectors and firm sizes, managerial and policy implications should focus on reducing barriers to women’s access to leadership positions and improving organizational conditions for retention and career progression, rather than on uniform productivity-based incentives.
Originality/value
The findings suggest that women’s access to CEO and board positions is relevant for discussions on corporate governance, leadership pipelines and talent retention. However, the results should be interpreted as conditional associations rather than causal evidence that increasing female leadership automatically improves productivity. Since the estimated relationships vary across sectors and firm sizes, managerial and policy implications should focus on reducing barriers to women’s access to leadership positions and improving organizational conditions for retention and career progression, rather than on uniform productivity-based incentives.