THE UNDERGRADUATE BERKELEY ECONOMIC REVIEW
Contents
138
I.
Introduction.......................................................................................140 1.1 Motivation................................................................................................141 1.2 Theoretical Foundations and Hypotheses................................................143 1.3 Contributions to Existing Literature........................................................144 1.4 Findings and Organization of Paper........................................................146
II.
Literature Review..............................................................................148 2.1 Gender Diversity in the Boardroom and Firm Value...............................148 2.1.1 Economic Arguments and Greater Gender Diversity....................148 2.1.2 Agency Theory and Empirical Evidence.......................................149 2.1.3 Resource Dependence Theory and Empirical Evidence.................150 2.1.4 Social Psychological Theory and Empirical Evidence...................150 2.2 Gender Diversity in the Boardroom and Directors Remuneration...........152 2.2.1 Optimal Contracting Approach and Empirical Evidence..............152 2.2.2 Managerial Power Approach and Empirical Evidence..................153 2.3 Review of Arguments Applied to India’s Context...................................154 2.3.1 Understanding Gender Diversity and Firm Performance in India..........................................................................................154 2.3.2 Understanding Gender Diversity and Directors Compensation in India..........................................................................................155
III.
Gender Diversity and Firm Performance...........................................156 3.1 Data Sources and Construction of Dataset..............................................156 3.2 Overall Descriptive Statistics for Company Performance........................157 3.3 Comparison of Firm Performance with and without Female Directors...161 3.4 Empirical Strategy...................................................................................163 3.4.1 Dependent Variables.....................................................................164 3.4.2 Independent Variable....................................................................165 3.4.3 Control Variables..........................................................................165 3.5 Other Measures of Performance: Variables to Measure Risk...................166 3.6 Empirical Results and Key Findings........................................................169 3.6.1 Robustness Check 1 - Winsorizing Variables................................170 3.6.2 Robustness Check 2 - Fixed Effects Regression............................174 3.6.3 Robustness Check 3 - Difference-in-Differences Model..................175