TY - JOUR
T1 - The effect of shareholder litigation rights on female board representation
T2 - A quasi-natural experiment
AU - Chatjuthamard, Pattanaporn
AU - Kijkasiwat, Ploypailin
AU - Jiraporn, Pornsit
N1 - Publisher Copyright:
© 2022 Chatjuthamard et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
PY - 2022/9
Y1 - 2022/9
N2 - Employing as a quasi-natural experiment an unexpected judgment by the Ninth Circuit Court of Appeals that raised the difficulty of shareholder litigation, we explore the effect of shareholder litigation rights on board gender diversity. Our difference-in-difference estimates show that an exogenous reduction in shareholder litigation risk results in significantly less female board representation, a decline by 11.44% in particular. Our findings corroborate the view that strong shareholder litigation rights strengthen internal governance such as board oversight. Therefore, when shareholder litigation rights are weakened, there is a drop in board quality. Additionally, we document a decline in board independence and an increase in board size following the Ninth Circuit ruling, both of which are associated with poorer board monitoring. Further analysis validates the results. i.e., propensity score matching, entropy balancing, GMM dynamic panel data estimation, and Oster’s (2019) testing for coefficient stability. Based on a quasi-natural experiment, our conclusion probably reflects a causal influence, rather than a mere correlation.
AB - Employing as a quasi-natural experiment an unexpected judgment by the Ninth Circuit Court of Appeals that raised the difficulty of shareholder litigation, we explore the effect of shareholder litigation rights on board gender diversity. Our difference-in-difference estimates show that an exogenous reduction in shareholder litigation risk results in significantly less female board representation, a decline by 11.44% in particular. Our findings corroborate the view that strong shareholder litigation rights strengthen internal governance such as board oversight. Therefore, when shareholder litigation rights are weakened, there is a drop in board quality. Additionally, we document a decline in board independence and an increase in board size following the Ninth Circuit ruling, both of which are associated with poorer board monitoring. Further analysis validates the results. i.e., propensity score matching, entropy balancing, GMM dynamic panel data estimation, and Oster’s (2019) testing for coefficient stability. Based on a quasi-natural experiment, our conclusion probably reflects a causal influence, rather than a mere correlation.
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U2 - 10.1371/journal.pone.0272792
DO - 10.1371/journal.pone.0272792
M3 - Article
C2 - 36129933
AN - SCOPUS:85138459882
SN - 1932-6203
VL - 17
JO - PloS one
JF - PloS one
IS - 9 September
M1 - e0272792
ER -