Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 53, No. 5, pp.1299-1321
ISSN: 1226-1874 (Print)
Print publication date 31 Oct 2024
Received 13 Aug 2024 Revised 03 Oct 2024 Accepted 17 Oct 2024
DOI: https://doi.org/10.17287/kmr.2024.53.5.1299

Female Presence in Top Management Teams and Firms’ Risk-Taking

Jiyoon Chung ; Jangwook Lee
(First Author) Associate Professor, Department of Global Commerce, College of Economics and International Commerce, Soongsil University jchung@ssu.ac.kr)
(Corresponding Author) Assistant Professor, School of Business, Ewha Womans University Jangwook.lee@ewha.ac.kr
여성의 최고경영진(TMT) 참여와 기업의 위험 감수
정지윤 ; 이장욱
(주저자) 숭실대학교 경제통상대학 글로벌통상학과 부교수
(교신저자) 이화여자대학교 경영대학 조교수


Copyright 2024 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

We examine the effect of female presence in top management teams (TMTs) on firms’ risk-taking by employing data on the executives of U.S.-listed firms from 2005 through 2018. Exploiting state-level variation in policies supporting women and families in the workplace as an instrument, we show that firms with a higher number of female executives in TMTs have lower stock return volatilities. The effect of female TMT presence on firm risk is larger in small firms, wherein decision-making processes presumably depend more on individual TMT members’ characteristics than in large firms. We find evidence that firms with female TMT members tend to make less risky choices in managerial decisions, especially regarding operating leverage. This study provides important opportune insights into the risk consequences of gender-diverse TMTs.

Keywords:

female, risk, top management team

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∙ Jiyoon Chung is currently working as an Associate Professor at the Department of Global Commerce at Soongsil University. She received a B.S. in Industrial Management at Purdue University, and a Ph.D. in Strategic Management and Entrepreneurship at the University of Illinois at Urbana-Champaign. After her Ph.D., she worked as an Assistant Professor at the School of Management and Economics at the Chinese University of Hong Kong at Shenzhen. Her research interest encompasses innovation strategy, global strategy, and sustainability management strategy.

∙ Jangwook Lee is currently an assistant professor of finance at the Ewha Womans University School of Business. He graduated from Seoul National University, Department of Communication (double-major in economics), received a master's degree in statistics from Columbia University, and a doctorate in Finance from the University of Illinois at Urbana-Champaign. After receiving his doctorate, he worked as a research fellow at the Korea Development Institute. His main research areas include asset pricing, R&D, and innovation.