Board gender diversity and earnings quality. Evidence from the Latin American integrated market (MILA)
DOI:
https://doi.org/10.17533/udea.rc.n72a08Keywords:
financial information quality, gender diversity, board of directors, Latin AmericaAbstract
Board gender diversity is an issue of recent interest in corporate finance research. Nonetheless, there are too few studies about the influence of female directors on earnings quality in the developed markets. This situation is not better for emerging markets, where, except for China, studies like this are almost nonexistent. Consequently, this paper sheds light on the relationship between board gender diversity and earnings quality in Latin America, focusing on the listed firms in Mexico, Chile, Peru, and Colombia, which integrate the Latin American Integrated Market (Mercado Integrado Latino Americano or MILA in Spanish). With a data-panel of 361 observations from the period between 2002 and 2014, this work performs OLS regressions that indicate the existence of an inverted U-shaped relationship between board gender diversity and earnings manipulation, after controlling for other variables such as size, leverage, ROA, operating cash flow, accounting losses, and industry. Furthermore, results indicate the existence of a minimum level of female directors, 30.8% of board members, from which more board gender diversity leads to higher earnings quality.
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