Prior studies show that the effect of female directors on corporate investment efficiency is mixed. This article investigates this relationship in a weak corporate governance setting. With a data of 4,653 firm-years from 582 firms listed in Vietnam during the period 2009–2020, we find that female directors decrease corporate investment efficiency through increasing underinvestment and they have no significant effect on overinvestment. Moreover, the negative relationship between female directors and investment efficiency is stronger in state-owned firms.
AdamsR. B., & FerreiraD. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309. https://doi.org/http://dx.doi.org/10.1016/j.jfineco.2008.10.007
2.
AltmanE. I., HartzellJ., PeckM., & Salomon BrothersM. (1995). A scoring system for emerging market corporate debt. Emerging Markets Review, 6(4), 311–323.
3.
BakerM., SteinJ. C., & WurglerJ. (2003). When does the market matter? Stock prices and the investment of equity-dependent firms. The Quarterly Journal of Economics, 118(3), 969–1005.
4.
BiddleG. C., HilaryG., & VerdiR. S. (2009). How does financial reporting quality relate to investment efficiency? Journal of Accounting and Economics, 48(2), 112–131. https://doi.org/https://doi.org/10.1016/j.jacceco.2009.09.001
5.
BorisovaG., BrockmanP., SalasJ. M., & ZagorchevA. (2012). Government ownership and corporate governance: Evidence from the EU. Journal of Banking & Finance, 36(11), 2917–2934. https://doi.org/https://doi.org/10.1016/j.jbankfin.2012.01.008
6.
BoubakriN., & CossetJ.-C. (1998). The financial and operating performance of newly privatized firms: Evidence from developing countries. The Journal of Finance, 53(3), 1081–1110. https://doi.org/10.1111/0022-1082.00044
7.
BoubakriN., CossetJ.-C., & GuedhamiO. (2005). Liberalization, corporate governance and the performance of privatized firms in developing countries. Journal of Corporate Finance, 11(5), 767–790. https://doi.org/https://doi.org/10.1016/j.jcorpfin.2004.05.001
8.
CampbellK., & Mínguez-VeraA. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83(3), 435–451. https://doi.org/10.1007/s10551-007-9630-y
9.
CarterD. A., SimkinsB. J., & SimpsonW. G. (2003). Corporate governance, board diversity, and firm value. Financial Review, 38(1), 33–53.
10.
Chen El GhoulS., GuedhamiO., & WangH. (2017). Do state and foreign ownership affect investment efficiency? Evidence from privatizations. Journal of Corporate Finance, 42, 408–421.
11.
ChenJ., LeungW. S., SongW., & GoergenM. (2019). Why female board representation matters: The role of female directors in reducing male CEO overconfidence. Journal of Empirical Finance, 53, 70–90. https://doi.org/https://doi.org/10.1016/j.jempfin.2019.06.002
12.
ChenS., SunZ., TangS., & WuD. (2011). Government intervention and investment efficiency: Evidence from China. Journal of Corporate Finance, 17(2), 259–271. https://doi.org/https://doi.org/10.1016/j.jcorpfin.2010.08.004
13.
ChuS., & OldfordE. (2022). Female directors, R&D activities and firms’ investment efficiency: Evidence from China. Asia-Pacific Journal of Accounting & Economics, 30(4), 1–22. https://doi.org/10.1080/16081625.2021.2023025
14.
D’SouzaJ., MegginsonW., & NashR. (2005). Effect of institutional and firm-specific characteristics on post-privatization performance: Evidence from developed countries. Journal of Corporate Finance, 11(5), 747–766. https://doi.org/https://doi.org/10.1016/j.jcorpfin.2004.12.001
15.
DaoT. H., TranQ. T., NguyenT. M., & NguyenT. S. (2022). Creditor protection, shareholder protection, and cost of debt financing around the world. Australian Journal of Management, 48(1), 90–107. 03128962221083375. https://doi.org/10.1177/03128962221083375
16.
DeWenterK. L., & MalatestaP. H. (2001). State-owned and privately owned firms: An empirical analysis of profitability, leverage, and labor intensity. American Economic Review, 91(1), 320–334. https://doi.org/10.1257/aer.91.1.320
17.
ErhardtN. L., WerbelJ. D., & ShraderC. B. (2003). Board of director diversity and firm financial performance. Corporate Governance: An International Review, 11(2), 102–111. https://doi.org/https://doi.org/10.1111/1467-8683.00011
18.
FischerE. M., ReuberA. R., & DykeL. S. (1993). A theoretical overview and extension of research on sex, gender, and entrepreneurship. Journal of Business Venturing, 8(2), 151–168. https://doi.org/https://doi.org/10.1016/0883-9026(93)90017-Y
19.
GuglerK., MuellerD. C., & YurtogluB. B. (2004). Marginal q, Tobin’s q, cash flow, and investment. Southern Economic Journal, 70(3), 512–531.
20.
GuptaN. (2005). Partial privatization and firm performance. The Journal of Finance, 60(2), 987–1015.
21.
HaiB. X., & NunoiC. (2008). Corporate governance in Vietnam: A system in transition. Hitotsubashi Journal of Commerce and Management, 42(1), 45–65.
22.
HoT., PhungD. N., & NguyenY. N. (2021). State ownership and corporate risk-taking: Empirical evidence in Vietnam. Australian Economic Papers, 60(3), 466–481.
23.
HofstedeG., HofstedeG. J., & MinkovM. (2010). Cultures and organizations: Software of the mind. Administrative Science Quarterly, 38(1), 132–134.
24.
HurleyD., & ChoudharyA. (2020). Role of gender and corporate risk taking. Corporate Governance: The International Journal of Business in Society, 20(3), 383–399. https://doi.org/10.1108/CG-10-2018-0313
25.
JensenM. C., & MecklingW. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/http://dx.doi.org/10.1016/0304-405X(76)90026-X
26.
JinZ., SongS., & YangX. (2014). The role of female directors in corporate investment in China. China Journal of Accounting Studies, 2(4), 323–344. https://doi.org/10.1080/21697213.2014.984265
27.
KhawK. L.-H., LiaoJ., TripeD., & WongchotiU. (2016). Gender diversity, state control, and corporate risk-taking: Evidence from China. Pacific-Basin Finance Journal, 39, 141–158. https://doi.org/https://doi.org/10.1016/j.pacfin.2016.06.002
28.
KyawK., OlugbodeM., & PetracciB. (2015). Does gender diverse board mean less earnings management? Finance Research Letters, 14, 135–141. https://doi.org/https://doi.org/10.1016/j.frl.2015.05.006
29.
LocT. D., LanjouwG., & LensinkR. (2006). The impact of privatization on firm performance in a transition economy. Economics of Transition and Institutional Change, 14(2), 349–389. https://doi.org/https://doi.org/10.1111/j.1468-0351.2006.00251.x
30.
McGeeR. W. (2009). An overview of corporate governance practices in Vietnam. In McGeeR. W. (Ed.), Corporate Governance in Developing Economies: Country Studies of Africa, Asia and Latin America (pp. 235–238). Springer US. https://doi.org/10.1007/978-0-387-84833-4_30
31.
McLeanR. D., ZhangT., & ZhaoM. (2012). Why does the law matter? Investor protection and its effects on investment, finance, and growth. The Journal of Finance, 67(1), 313–350.
32.
MegginsonW. L., NashR. C., & Van RandenborghM. (1994). The financial and operating performance of newly privatized firms: An international empirical analysis. The Journal of Finance, 49(2), 403–452.
33.
MillerT., & del Carmen TrianaM. (2009). Demographic diversity in the boardroom: Mediators of the board diversity–firm performance relationship. Journal of Management Studies, 46(5), 755–786.
34.
MinhT. L., & WalkerG. (2008). Corporate governance of listed companies in Vietnam. Bond Law Review, 20(2), 118–197.
35.
MirzaS. S., MajeedM. A., & AhsanT. (2020). Board gender diversity, competitive pressure and investment efficiency in Chinese private firms. Eurasian Business Review, 10(3), 417–440. https://doi.org/10.1007/s40821-019-00138-5
36.
ModiglianiF., & MillerM. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261–297.
37.
MyersS. C., & MajlufN. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. https://doi.org/http://dx.doi.org/10.1016/0304-405X(84)90023-0
38.
NguyenD. (2008). Corporate governance in Vietnam: Regulations, practices and problems. Central Institute for Economic Management, 1–69.
39.
Nguyen ThiQ. N., TranQ. T., & DoanH. P. (2021). Foreign ownership, state ownership and cash holdings under the global financial crisis: Evidence from the emerging market of Vietnam. International Journal of Emerging Markets. Advance online publication. https://doi.org/10.1108/IJOEM-03-2020-0303
40.
Pucheta-MartínezM. C., Bel-OmsI., & Olcina-SempereG. (2018). Female institutional directors on boards and firm value. Journal of Business Ethics, 152(2), 343–363. https://doi.org/10.1007/s10551-016-3265-9
41.
Pucheta-MartínezM. C., Bel-OmsI., & Olcina-SempereG. (2016). Corporate governance, female directors and quality of financial information. Business Ethics: A European Review, 25(4), 363–385.
42.
RichardsonS. (2006). Over-investment of free cash flow. Review of Accounting Studies, 11(2-3), 159–189.
43.
ShinY. Z., ChangJ.-Y., JeonK., & KimH. (2020). Female directors on the board and investment efficiency: Evidence from Korea. Asian Business & Management, 19(4), 438–479. https://doi.org/10.1057/s41291-019-00066-2
44.
TangC.-H., LeeY.-H., LeeM.-C., & HuangY.-L. (2020). CEO characteristics enhancing the impact of CEO overconfidence on firm value after mergers and acquisitions—a case study in China. Review of Pacific Basin Financial Markets and Policies, 23(1), 2050003
45.
TranQ. T. (2019). Independent directors and corporate investment: Evidence from an emerging market. Journal of Economics Development, 21(1), 30–41.
46.
TranQ. T. (2020a). Financial crisis, shareholder protection and cash holdings. Research in International Business and Finance, 52, 101131. https://doi.org/https://doi.org/10.1016/j.ribaf.2019.101131
47.
TranQ. T. (2020b). Foreign ownership and investment efficiency: New evidence from an emerging market. International Journal of Emerging Markets, 15(6), 1185–1199. https://doi.org/10.1108/IJOEM-07-2019-0573
48.
TranQ. T. (2021). State ownership and value of cash: new evidence from an emerging market. International Journal of Emerging Markets. Advance online publication. https://doi.org/10.1108/IJOEM-02-2020-0196
49.
UllahI., MajeedM. A., & FangH.-X. (2021). Female CEOs and corporate investment efficiency: Evidence from China. Borsa Istanbul Review, 21(2), 161–174.
50.
UllahI., MajeedM. A., FangH.-X., & KhanM. A. (2020). Female CEOs and investment efficiency: Evidence from an emerging economy. Pacific Accounting Review, 32(4), 443–474. https://doi.org/10.1108/PAR-08-2019-0099
51.
UllahI., ZebA., KhanM. A., & XiaoW. (2020). Board diversity and investment efficiency: evidence from China. Corporate Governance: The International Journal of Business in Society, 20(6), 1105–1134. https://doi.org/10.1108/CG-01-2020-0001
52.
WahidA. S. (2019). The effects and the mechanisms of board gender diversity: Evidence from financial manipulation. Journal of Business Ethics, 159(3), 705–725. https://doi.org/10.1007/s10551-018-3785-6
53.
WooldridgeJ. M. (2010). Econometric Analysis of Cross Section and Panel Data(10th ed.). MIT Press.
