The influence of board gender diversity on the value of NZX listed firms and its association with growth options

Our study principally examines the relationship between board gender diversity and firm value and the extent to which this relationship is affected by the level of growth options relative to assets-in-place. Using a sample of 865 firm-years covered by 125 firms listed on the New Zealand Exchange during the 1998-2007 financial years, we found that board gender diversity together with the level of growth options significantly affects firm value after effectively controlling for the endogeneity and self-selection bias problem. Specifically, firms with a higher percentage of female directors on the board have higher firm value. This positive relationship between the percentage of female directors on the board and firm value is more apparent among firms with high levels of growth options. However, among firms having at least one female director on the board, this positive relationship between board gender diversity and firm value becomes less apparent among firms with higher growth options. Given the current overseas regulatory developments promoting the percentage of female directors on the board, our findings have important implications for corporate regulators.