The Effect of Female Directors on Firm Performance: Evidence From the Great Recession

We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms’ performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008–2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms’ performance, but this positive effect weakens during recessions.

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How hospitality firm executive diversity affects firm performance

International Journal of Contemporary Hospitality Management ◽

10.1108/ijchm-08-2019-0728 ◽

2020 ◽

Vol 32 (9) ◽

pp. 2777-2792

Author(s):

Toni Repetti

Keyword(s):

Firm Performance ◽

Great Recession ◽

Random Effect ◽

Gender Diversity ◽

Female Representation ◽

Content Type ◽

The Great Recession ◽

Management Positions ◽

High Level ◽

Random Effect Models

Purpose Women make up approximately 47% of the workforce and 51% of hospitality employees but account for 70% of travel buying decisions. Even with these high statistics, women are still underrepresented in many high-level positions. This paper aims to evaluate the financial effects of diversity in top paying management positions within US hospitality companies from 2006 to 2018 and also evaluate the change in female representation from the Great Recession and the #metoo scandal. Design/methodology/approach Firm performance and diversity were studied using fixed effect and random effect models due to the panel nature of the data. ANOVAs and t-tests were conducted to determine the change in female representation. Findings On average, companies report 5.55 top paying executives and only 0.75 of them are female. Results show that earnings before interest and taxes, and earnings before interest, taxes, depreciation and amortization are both significantly higher with 15–30% diversity and even higher with 30–50% diversity. After the Great Recession, hospitality companies significantly increased the percentage of females in top positions from 11.5 to 14.1%, while resorts increased female representation from 7.5 to 12.2% after the #metoo scandal. Originality/value To the best of the author’s knowledge, this is the first known study to evaluate gender diversity in top hospitality executives and not just female representation. This is also the first paper to evaluate the effect of the #metoo scandal on hospitality firms’ percentage of females in top executive positions.

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