Fi ew, Banchayehu Gi ma
A icle
Gende di e si y and i m pe o mance: e idence om
Malaysia boa d ooms
Cogen Economics & Finance
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Taylo & F ancis G oup
Sugges ed Ci a ion: Fi ew, Banchayehu Gi ma (2024) : Gende di e si y and i m pe o mance:
e idence om Malaysia boa d ooms, Cogen Economics & Finance, ISSN 2332-2039, Taylo &
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Gende di e si y and fi m pe o mance: e idence
om Malaysia boa d ooms
Banchayehu Gi ma Fi ew
To ci e his a icle: Banchayehu Gi ma Fi ew (2024) Gende di e si y and fi m pe o mance:
e idence om Malaysia boa d ooms, Cogen Economics & Finance, 12:1, 2381135, DOI:
10.1080/23322039.2024.2381135
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GENERAL & APPLIED ECONOMICS | RESEARCH ARTICLE
Gende di e si y and i m pe o mance: e idence om Malaysia
boa d ooms
Banchayehu Gi ma Fi ew
Economics Depa men , Deb e Be han Uni e si y, Deb e Be han, E hiopia
ABSTRACT
This s udy con ibu es o he li e a u es on he in luence o Malaysia’s boa d o di ec-
o s’gende di e si ica ion equi emen (so law) on women’s pa icipa ion in such
posi ions. In addi ion, i examines he e ec o gende di e si ica ion equi emen o
he boa d o di ec o s’on i m pe o mance, boa d size, and boa d membe cha ac e -
is ics. The empi ical analysis was based on da a aken om he O bis (Bu eau an
Dijk) da abase and annual epo s pos ed on he Bu sa Malaysia S ock ma ke o 452
la ge and e y la ge publicly lis ed i ms o he pe iod 2007–2016. The equi emen
signi ican ly inc eased emale pa icipa ion in he boa d o di ec o s, al hough he
30% se a ge was no achie ed. The indings show ha gende di e si ica ion o he
boa d o di ec o s has a nega i e e ec on i m size ( o al e enue and o al asse ) in
only highe echnology in ensi e manu ac u ing sec o and i ms in good compe i ion
sec o s; i has no e ec on o he sec o s. This nega i e e ec inding is consis en
wi h social iden i y heo y. Gende di e si ica ion o he boa d o di ec o s has no
impac on i m e iciency (p o i ma gin, Re u n on Equi y (ROE), Tobin’s Q). This esul
does no suppo esou ce dependency and agency heo y, o social iden i y heo y.
The gende di e si y equi emen ad e sely a ec s he boa d di ec o s’le el o expe i-
ence and age wi h no e ec on boa d membe s’size and educa ional quali ica ions.
The indings a e obus ac oss di e en econome ics models [ ixed e ec and
Ins umen al a iables (IV)] ha deal wi h endogenei y issues, and al e na i e i m size
and i m e iciency measu emen s.
IMPACT STATEMENT
All communi ies unde s ood he ole o emales in economic de elopmen . In many
coun ies, Non-Go e nmen al and Go e nmen al o ganiza ions a e wo king on gende
di e si ica ion. This s udy iden i ies he e ec o gende di e si ica ion equi emen o
Malaysian boa d o di ec o s on i m pe o mance. This equi emen inc eases emale
pa icipa ion in he boa d o di ec o s. Gende ’s di e si ica ion o he di ec o s had a
nega i e e ec on i m size in only highe echnology in ensi e manu ac u ing sec o
and i ms in good compe i ion sec o s; i has no e ec on o he sec o s. In addi ion,
boa d o di ec o s’gende di e si y has no impac on i m e iciency measu emen .
ARTICLE HISTORY
Recei ed 3 Oc obe 2023
Re ised 7 Ma ch 2024
Accep ed 8 July 2024
KEYWORDS
Malaysia; boa d di ec o s;
gende di e si y; i m
pe o mance
REVIEWING EDITOR
D Ch is Jones, Economics,
Finance & En ep eneu ship,
As on Uni e si y,
Bi mingham, Uni ed
Kingdom o G ea B i ain
and No he n I eland
SUBJECTS
Li e a u e & Gende S udies;
Gende - ela ed Issues;
Gende S udies; Gende
Inequali y
1. In oduc ion
Wo ldwide, women ace subs an ial challenges in eaching he highes echelon in hei ca ee s, pa icula ly
a he boa d o di ec o s’. Ac oss 67 coun ies in he wo ld, he sha e o women boa d di ec o s is 10.3%,
wi h he lowes a e in Mo occo (0%) and he highes a e in No way (42%) (Te jesen e al., 2015). Owing
o mo e di e se and cohesi e hinking, gende balanced boa ds may ha e he capaci y o imp o e he
wo k en i onmen , p oduc i i y, and inancial pe o mance. The e o e, he gende quo a equi emen o
he boa d o di ec o s, may imp o e economic g ow h (Eu opean Commission, 2012). No way Minis e ,
Gab ielsen, s a ed in his speech ha , denying an oppo uni y o women o be in highe posi ions is a
was e o he esou ces ha socie y in es ed in educa ing hei daugh e s (Te jesen & Sealy, 2016).
CONTACT Banchayehu Gi ma Fi ew [email p o ec ed] Economics Depa men , Deb e Be han Uni e si y, Deb e Be han,
E hiopia
ß2024 The Au ho (s). Published by In o ma UK Limi ed, ading as Taylo & F ancis G oup
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. The e ms on which his a icle has been
published allow he pos ing o he Accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
COGENT ECONOMICS & FINANCE
2024, VOL. 12, NO. 1, 2381135
h ps://doi.o g/10.1080/23322039.2024.2381135
In ligh o he abo e, many coun ies ha e se gende quo as and di e si ica ion as equi emen s o he
appoin men o boa d di ec o s. Aus alia, Aus ia, Belgium, Canada, Denma k, Finland, F ance, Ge many,
Iceland, India, I eland, Is ael, I aly, Kenya, Luxembou g, Malawi, Malaysia, Ne he lands, Nige ia, No way,
Poland, Sou h A ica, Spain, Sweden, he Uni ed Kingdom, and he Uni ed S a es a e among he coun-
ies ac i ely wo king on gende di e si ica ion. Some o hese coun ies se gende quo a equi emen s
wi h sanc ions (ha d law), while o he s explici ly se gende di e si ica ion in appoin ing boa d di ec o s
as a equi emen in he Code o Co po a e Go e nance (so law) (Te jesen e al., 2015). Some s udies
ha e a gued ha so law is no e ec i e (G ay, 2015; Labelle e al., 2015). Howe e , Sweden, a coun y
wi h so law (a equi emen in i s Co po a e Go e nance Code), is among hose who achie ed he high-
es a e o women’s ep esen a ion on he boa d o di ec o s (Te jesen e al., 2015).
Gende di e si y on boa d has been an issue ha is a ac ing emendous a en ion om academi-
cians. Se e al heo e ical a gumen s exis ega ding he ela ionship be ween he gende di e si y o he
boa d o di ec o s and he pe o mance o i ms. Howe e , p io li e a u es a e based on he mixed and
some imes con adic o y heo ies and empi ical esul s, s ill he e is no consensus ega ding he associ-
a ion o be ween he boa d o di ec o s’gende di e si y and i m pe o mance. Dependence heo y and
agency heo y sugges posi i e ela ionships be ween he gende di e si y o he boa d o di ec o s and
i m pe o mance (P e e & Salancik, 1978; Hillman e al., 2007; Gallego-Al a ez e al., 2010). In con as ,
social iden i y heo y sugges s ha he boa d o di ec o s’gende di e si y has a nega i e e ec on i m
pe o mance (Ancona & Caldwell, 1992). Empi ically, some esea che s ha e ound a posi i e ela ionship
be ween he gende di e si y o he boa d o di ec o s and i m pe o mance (N im, 2015;Kılıc¸ & Kuzey,
2016; Regue a-Al a ado e al., 2017; A ani is e al., 2022). O he esea che s ound nega i e o no s a is-
ically signi ican ela ionship be ween he boa d o di ec o s’gende di e si y and i m pe o mance
(Ma ino a e al., 2016; Eckbo e al. 2016; Fe a i e al., 2022; Ma quez-Ca denas e al., 2022; Ahe n &
Di ma , 2012). The e ec s o he gende di e si y o he boa d o di ec o s on i m pe o mance esul s
a e he e ogeneous ac oss coun ies (Comi e al., 2017). Majo i y p io s udies ocus on he case o de el-
oped coun ies (Ma ino a e al., 2016; Comi e al., 2017; Regue a-A a ado e al., 2017; Fe a i e al., 2022;
A ani is e al., 2022).
Malaysia has been wo king on gende equali y in appoin men s a decision-making posi ions since
2004, whe ein he go e nmen o Malaysia issued a equi emen ha a leas 30% o such posi ions in
public sec o should be illed by women. The P ime Minis e o Malaysia, M . Najib Razak ex ended his
equi emen o he p i a e sec o in 2011 (Abdullah, 2014). They also se 30% women’s boa d o di ec-
o s’ a ge by 2016 in hei 2011 Co po a e Go e nance Bluep in (MCCG, 2011). In 2012, Malaysia issued
a code o co po a e go e nance ha equi es boa ds o se gende di e si y as a equi emen o
appoin men o boa d di ec o s, o ake ac ion ha helps achie e he a ge , and o disclose he policy
and i s pe o mance in hei annual epo (MCCG, 2012). Howe e , la e in 2017, he 30% women boa d
o di ec o s’ equi emen was eissued; limi ing he equi emen o only e y la ge i ms, i.e. companies
in he FTSE bu sa Malaysia Top 100 Index (MCCG, 2017). The Malaysian 30% emale boa d o di ec o s’
equi emen has a ac ed he a en ion o many esea che s (Abdullah, 2014; Low e al., 2015; Te jesen
e al., 2015). Low e al. (2015) conside ed he gende di e si ica ion equi emen o he Malaysian boa d
o di ec o s’as a possible eason o Malaysia ha ing a ela i ely highe sha e o emale di ec o s com-
pa ed o o he Asian coun ies. The gende di e si ica ion ule o he boa d o di ec o s is mainly used
in de eloped na ions, pa icula ly in he Eu opean Union (EU). The s udy unde aken by Syed and Van
Bu en (2014) concluded ha such equi emen is di icul o implemen in Muslim domina ed coun ies,
whe ein hey sugges aking he ela ionship be ween eligion, cul u e, and business in o conside a ion.
The e o e, i is ascina ing o s udy he in luence o he gende di e si ica ion equi emen o Malaysia
boa d o di ec o s’on he sha e o emale di ec o s, and i s impac on i m pe o mance.
To achie e i s objec i es, his s udy ocuses on la ge and e y la ge i ms lis ed on he Bu sa Malaysia
S ock Ma ke Exchange and he O bis da abase. Da a on pe o mance measu emen s such as o al
asse s, o al e enue, p o i ma gin, Re u n on Equi y (ROE), Tobin’s Q and sec o dis ibu ion in o ma ion
a e aken om he O bis da abase. In o ma ion on each boa d membe ’s cha ac e is ics such as age,
educa ion, sex, and yea s o expe ience is aken om he Bu sa Malaysia S ock Exchange. This s udy
examines he p og ess and e ec o he gende di e si ica ion equi emen o Malaysian boa ds o di ec-
o s on i m pe o mance, boa d size, and boa d membe s’cha ac e is ics.
2 B.G. FIREW
The e a e 866 la ge and e y la ge i ms in he O bis da abase. This s udy excluded ag icul u e, non-
p o i public o ganiza ions, and i ms wi h missing in o ma ion on i m pe o mance. The s udy ocuses
on i ms wi h iden ical name in he O bis da abase and Bu sa Malaysia s ock ma ke exchange and uses
a inal sample o 429 i ms wi h a balanced panel o 2007–2016. This s udy add esses whe he he gen-
de di e si ica ion equi emen o he boa d in luences he sha e o emale di ec o s; and whe he i
a ec s i m pe o mance, boa d size, and boa d membe cha ac e is ics. This s udy used an iden i ica ion
s a egy simila o Ahe n and Di ma (2012) ha is ixed e ec s panel da a wi h an IV s a egy.
This s udy con ibu es o he exis ing li e a u e in a ious ways. Fi s , mos p io esea ch has ocused
on ha d law in de eloped coun ies (Ahe n & Di ma , 2012; Comi e al., 2017; Fe a i e al., 2022).
Whe eas, his s udy explo es he in luence o he boa d o di ec o s gende di e si ica ion equi emen
(so law) on he sha e o emale boa d di ec o s and i s e ec on i ms’pe o mance, pa icula ly in a
Muslim domina ed de eloping coun y. Second, he esea che used an ex ensi e se o i m pe o m-
ance measu emen s such as i m size ( o al asse s and o al e enue) and e iciency [p o i ma gin,
Re u n on Equi y (ROE), and Tobin’s Q]. Thi d, his s udy conside s he in luence o o he ac o s, such as
age, educa ion, and expe ience o he boa d o di ec o s. Fou h, his s udy add essed he issue o
impac . Mos p io s udies used c oss-sec ional da a, whe ein i is di icul o add ess cause-and-e ec
issues (Hillman e al., 2007; Julizae ma & So i, 2012; Pos & By on, 2015). Fi h, his s udy uses a ela i ely
la ge numbe o i ms and da a o a longe du a ion (10yea s).
The indings o his s udy a e summa ized as ollows: A) al hough he Malaysian boa d o di ec o s’
gende di e si ica ion equi emen couldn’ achie e i s 30% a ge , i con ibu ed posi i ely o emale
pa icipa ion, exp essed in e ms o ha ing a leas one emale boa d di ec o , pe cen age o emale
boa d di ec o s, and he dummy o i ms ha achie ed he 30% emale boa d di ec o s. The mo e quali-
ied emales pa icipa ed on he boa d o di ec o s a e he equi emen . Women appoin ed as boa d
di ec o s a e he equi emen we e mo e quali ied han hei emale p edecesso s in many dimensions.
B) Boa d gende di e si ica ion has a nega i e impac on i m size ( o al e enue and asse s), bu has no
impac on e iciency (p o i ma gin, ROE, and Tobin’s Q). The indings om he ins umen al a iable es i-
ma es a e also consis en wi h hose o he ixed e ec es ima es. C) Boa d gende di e si ica ion
equi emen has no e ec on boa d size and boa d o di ec o s’educa ional quali ica ions bu has a
nega i e e ec on hei age and expe ience as a boa d di ec o . D) The gende di e si ica ion equi e-
men o he boa d o di ec o s has a nega i e e ec on i m size in highe echnology-in ensi e manu-
ac u ing sec o s and i ms in good compe i ion sec o s, whe eas i has no e ec on o he sec o s. In
e ms o Tobin’s Q, he gende di e si ica ion equi emen o he boa d o di ec o s has a posi i e e ec
on he echnology-in ensi e manu ac u ing sec o and i ms in good compe i ion sec o s. The esea che
ound no sec o -based di e ence in he e ec o gende di e si ica ion equi emen o he boa d o
di ec o s on o he i m e iciency measu emen s. In addi ion, he e is no e idence ha he gende di e -
si ica ion equi emen o he boa d o di ec o s has an asymme ic e ec in e ms o i m size on majo -
i y o i m pe o mance measu emen s.
2. Theo e ical li e a u e e iew
Bo h heo e ical and empi ical indings on he e ec o boa d di ec o s’gende di e si y on i m pe -
o mance a e mixed. Valuable insigh s in o connec ion be ween boa d di ec o s’gende di e si y and
i m pe o mance a e being p o ided by esou ce dependence heo y, agency heo y, and social iden i y
heo y (Ma ino a e al., 2016; N im, 2015;Kılıc¸ & Kuzey, 2016; Ma quez-Ca denas e al., 2022; A ani is
e al., 2022). The posi i e impac o boa d di ec o s’gende di e si y on i m pe o mance is explained
using esou ce dependency heo y and agency heo y. In con as , social iden i y heo y sugges s ha
he gende di e si y o he boa d o di ec o s nega i ely a ec s i m pe o mance.
Acco ding o he esou ce dependency heo y, gende di e si y can ha e a posi i e e ec on i m pe -
o mance by linking on i m o i s ex e nal en i onmen and inc ease i m access o c ucial esou ces
(P e e & Salancik, 1978; Hillman e al., 2007; Gallego-Al a ez e al., 2010). In his amewo k, he di e -
si y o gende on he boa d o di ec o s is a sou ce o di e en ideas, pe spec i es, expe iences, and
knowledge (Gallego-Al a ez e al., 2010;L
€
ucke a h-Ro e s, 2013; Regue a-Al a ado e al., 2017). All hese
addi ional esou ces can in luence he i m pe o mance posi i ely.
COGENT ECONOMICS & FINANCE 3
Acco ding o agency heo y, gende di e si y posi i ely a ec s i m pe o mance. The boa d di ec o s’
gende di e si y is inc eased boa d oom independence and be e moni o ing o manage s and his
change posi i ely a ec s i m pe o mance (Gallego-Al a ez e al., 2010). Boa d di ec o s’gende di e si y
can imp o e i m pe o mance by educing he cos s ela ed o agency. Inco po a ion o women in he
boa d di ec o ’s posi ion is e adica ing he social and labo g ie ance, and inc ease e hical commi men
(Regue a-Al a ado e al., 2017).
In con as , o esou ce dependency and agency heo y, he social iden i y heo y sugges s ha boa d
di ec o s’gende di e si y nega i ely a ec s i m pe o mance. Based on his heo y, people ca ego ize
hemsel es in o di e en g oups; his sel -ca ego iza ion may lead con lic and o he p oblems. Gende
di e si y may slow down decision making p ocess and he p obabili y o eaching consensus. Di e si y
o op managemen eams is mo e cos ly and di icul (Ancona & Caldwell, 1992). Acco ding o Jehn
e al. (1999), di e si y o op managemen eams exace ba es di e en o ms o con lic .
3. Empi ical li e a u e e iew and hypo hesis de elopmen
The exis ing empi ical e idences conce ning he ela ionship be ween boa d gende di e si y and i m
pe o mance a e mixed. Thei indings can classi y in o h ee ca ego ies. In he i s ca ego y, esea che s
a gue ha he boa d o di ec o s’gende di e si y has a posi i e e ec on i m pe o mance (N im,
2015;Kılıc¸ & Kuzey, 2016; Regue a-Al a ado e al., 2017; A ani is e al., 2022). In he second ca ego y,
esea che s ound a nega i e e ec o boa d di ec o s’gende di e si y on i m pe o mance (Ahe n &
Di ma (2012). In he hi d ca ego y, esea che s indica ed ha boa d di ec o s’gende di e si y has no
e ec on i m pe o mance (Eckbo e al., 2016; Fe a i e al., 2022; Ma ino a e al., 2016; Ma quez-
Ca denas e al., 2022). Comi e al. (2017) s udy in he case o Eu opean coun ies ound he e ogeneous
esul s ac oss coun ies.
Wi h espec o Malaysia, unlike mos o he coun ies ha implemen ed he boa d o di ec o s gen-
de di e si ica ion equi emen , Malaysia is a de eloping coun y wi h high gende gap, Muslim domi-
na ed, and ha issued a so law. In 2018, he Wo ld Economic Fo um calcula ed gende gap index o
149 coun ies o measu e gende -based gaps in access o esou ces and oppo uni ies (heal h, educa-
ion, economic pa icipa ion, and poli ical empowe men ), whe ein Malaysia is anked 101
s
. They calcu-
la ed index o each indica o and hen a e aged each sub-index sco es o ob ain he o e all Global
Gende Gap Index. The inal alue anges be ween 1 (gende equali y) and 0 (gende inequali y). As
depic ed in Table A.5 based on he compa ison o 26 coun ies ha implemen ed boa d o di ec o s
gende di e si ica ion equi emen , Malaysia is anked 23
d
, p eceding India, Malawi and Nige ia, in e ms
o women economic pa icipa ion and oppo uni y, and o e all gende gap. India se a gende di e si i-
ca ion equi emen o a leas one emale o boa d di ec o , and Nige ia and Malawi se he equi emen
wi hou any quo a ( hey eques emale o pa icipa e a boa d o di ec o s le el wi hou se ing speci ic
numbe o he sha e o emale), while Malaysia se o achie e minimum o 30% emale boa d o di ec-
o s a ge by 2016. The ambi ious equi emen ha Malaysia se s, coupled wi h i s ea u es exp essed
as a Muslim domina ed de eloping coun y wi h high gende gap, is he inspi ing ac o s o s udy he
e ec i eness o he boa d gende di e si ica ion equi emen o he sha e emale boa d o di ec o s
and i s e ec on i m pe o mance.
Malaysia ini ially in oduced he concep o boa d o di ec o s gende di e si ica ion equi emen in
2004 by se ing a leas 30% a ge women a a decision-making le el in public sec o s. Al hough no a
he boa d o di ec o s’le el, he equi emen was success ul in b inging women o decision-making
posi ions. Due o he p omising esul , hey olled i ou o p i a e sec o s in 2011. The s udy unde aken
o e alua e he e ec i eness o he 2004 gende di e si ica ion equi emen a a decision-making le el
on he sha e o emale boa d di ec o s con i med ha he equi emen did no b ing s a is ically signi i-
can in luence (Ahmad-Zaluki, 2012). Malaysia secu i y commission explained ha “Gende is no only
he aspec o boa d di e si y bu has ecei ed global a en ion as an impo an componen o inclusi e
g ow h.”The commission u he indica ed he a ailabili y o su icien women wi h he equi ed quali i-
ca ions and expe ience o boa d o di ec o posi ions. Fu he , Abdullah e al. (2016) discussed ha gi ls
cons i u e he majo i y o uni e si y s uden s in Malaysia. As depic ed in g aph B.2 in Appendix A, based
4 B.G. FIREW
on he Wo ld Bank da a on e ia y school en ollmen in Malaysia, emale s uden s a e mo e likely o
en oll.
Malaysia in oduced he boa d o di ec o s’gende di e si ica ion equi emen e ec i e July 2011
wi h he goal o achie e 30% women pa icipa ion by 2016 (MCCG, 2011). Fu he mo e, in 2012, de ailed
equi emen issued o i ms o issue policy on boa d gende di e si ica ion and o disclose i wi h hei
e o o achie e he a ge on hei annual epo (MCCG, 2012). Malaysia secu i y commission explained
ha MCCG (2012) as a key deli e able o he MCCG (2011) Bluep in . The equi emen applies o all pub-
licly lis ed i ms, including hose on Bu sa Malaysia s ock ma ke exchange. The Bu sa Malaysia equi es
lis ed i ms o include in hei annual epo a s a emen abou he policy and s eps aken o achie e
he boa d o di ec o s’gende di e si ica ion and o he equi emen s. Ye , he equi emen is so law,
meaning sanc ion is no a ached o en o ce i . The equi emen is issued o gi e an oppo uni y o
quali ied women o become company boa d o di ec o s. Malaysia i ms did no publicly push back/
oppose he equi emen .
A he ime, he boa d o di ec o s’gende di e si ica ion was in oduced, he sha e o emale boa d
di ec o s was 8.2%. The equi emen has a ac ed he a en ion o many esea che s (Abdullah, 2014;
Lee e al., 2015; Low e al., 2015; Te jesen e al., 2015; Te jesen & Sealy, 2016). The s udy unde aken in
he case o Malaysia, Singapo e, and Sou h Ko ea concluded he equi emen , as he eason o Malaysia
ha ing a highe sha e o emale boa d di ec o s compa ed o he o he wo coun ies (Low e al., 2015).
Malaysia was unable o achie e he 30% a ge , and he e o e, he coun y ese he equi emen in
2017 limi ing he equi emen o e y la ge i ms, i.e. companies on he FTSE bu sa Malaysia Top 100
index o companies wi h ma ke capi aliza ion o RM 2 billion o abo e (MCCG, 2017).
Hypo hesis 1a (H1a). The e is no s a is ically signi ican ela ionship be ween boa d di ec o s’gende
di e si ica ion and i m pe o mance
Hypo hesis 1b (H1b). The e is s a is ically signi ican nega i e o posi i e ela ionship be ween boa d di ec o s’
gende di e si ica ion and i m pe o mance
4. Resea ch design
4.1. Desc ip ion o da a
This s udy uses wo sou ces o da a, he Bu sa Malaysia S ock Exchange and O bis (Bu eau an Dijk). O bis
is one o he mos powe ul da a sou ces wo ldwide. I con ains comp ehensi e in o ma ion on millions o
lis ed and unlis ed companies ac oss he wo ld. I collec s da a om mo e han 160 p o ide s (Acqui e
media, Asap in o m, Bisnode, bizpo al, Ce ed Cibi, Da - aP o, ellisphe e, EQULFAX, FACTSET, Fi ch
Solu ion, Global Da a, IBFD, ICAP, In o C edi , NICE in o ma ion se ice, p i a e equi y in o ma ion, Global
inancial in elligence, ZANDERS e c.) and o he sou ces (annual epo s, company websi es, newswi es e c).
I p o ides in o ma ion such as de ailed companies’con ac in o ma ion, indus y dis ibu ion, cu en and
his o ical inancial in o ma ion, a ios, c edi a ing, owne ship, and di ec o s. Based on he O bis classi ica-
ion, e y la ge i ms ha ul ill a leas one o he ollowing equi emen s –ope a ing e enue g ea e
han o equal o 100 Million Eu o (130 Million USD) / o al asse s g ea e han o equal o 200 Million Eu o
(260 Million USD) / and numbe o employees g ea e han o equal o 1000. La ge i ms ha ul ill a leas
one o he ollowing equi emen s –ope a ing e enue g ea e han o equal o 10 Million Eu o (13
Million USD) / o al asse g ea e han o equal o 20 Million Eu o (26 Million USD) / and he numbe o
employees g ea e han o equal o 150. I in o ma ion on o al e enue, o al asse s, and he numbe o
employees is una ailable, la ge i ms a e de ined as i ms wi h 5 Million Eu o (6.5 Million USD) capi al.
Fi ms wi h a ios o ope a ing e enue pe employee o o al asse s pe employee below 100eu o (130
USD) a e excluded om his ca ego y. This s udy ocuses on la ge and e y la ge i ms assuming ha such
i ms a e mo e likely o espond o gende di e si ica ion equi emen s. 866 la ge and e y la ge i ms a e
a ailable in he O bis da abase o he pe iod 2007–2016. A inal sample o 429 i ms’balanced panel da a
is used wi h a sample o 4290 obse a ions. The inal sample was de e mined by excluding ag icul u e,
non-p o i public o ganiza ions, i ms wi h missing in o ma ion on i m pe o mance measu emen s, and
COGENT ECONOMICS & FINANCE 5
ocusing on i ms wi h iden ical names in he Bu sa Malaysia and O bis (Bu eau an Dijk) da abase.
Ag icul u e, and nonp o i public o ganiza ions, excluded because hei pe o mance measu emen s a e di -
e en om he es , and some o hese sec o s a e subjec o go e nmen p ice egula ion. Nonp o i
o ganiza ions a e excluded based on hei objec i e, which is nonp o i (Table 1).
The esea che manually collec ed addi ional in o ma ion such as sex, educa ion, age, and yea s o
wo k expe ience as a boa d membe , om annual epo s pos ed on he Bu sa Malaysia S ock Ma ke
Exchange. To iden i y gende , he esea che used pho og aphs in he bio sec ion o he annual epo ,
o biog aphical in o ma ion by iden i ying p onouns such as she/he , o he/his, whene e pho og aphs
we e una ailable. I in o ma ion abou gende is missing in one annual epo , i is back illed om la e
epo s. The esea che agg ega ed he boa d o di ec o s’le el da a o he i m le el o calcula e he
numbe o boa d di ec o s, pe cen age o emale di ec o s, a e age age, and expe ience as a boa d
membe . Educa ional le el is classi ied in o ou ca ego ies –wi hou a deg ee, deg ee, mo e han one
deg ee o mas e ’s deg ee, and doc o a e deg ee. The a iables epo ed in mone a y e ms a e de la ed
using Malaysia’s GDP de la o ob ained om he Wo ld Bank (WB) wi h 2011 as he base yea .
To al asse s, o al e enue, p o i ma gin, Re u n on Equi y (ROE), and Tobin’s Q a e used o measu e
i m pe o mance. Tobin’s Q is he a io o he i m’s ma ke alue o asse eplacemen alue. ROE is he
a io o p o i be o e ax o sha eholde unds mul iplied by 100. The p o i ma gin is he a io o p o i
be o e ax o ope a ing e enue mul iplied by 100.
4.2. Me hod o analysis
This sec ion begins wi h a desc ip i e analysis o he in luence o he 2011 Malaysia’s boa d o di ec o s’
quo a equi emen on he sha e o emale di ec o s, boa d size, boa d membe cha ac e is ics, and i m
pe o mance. The esea che hen conduc s an econome ic analysis in which he pe cen age o emale
di ec o s is eg essed on a dummy o ea men be o e and a e 2011, and he i m ixed e ec .
Fu he , he loga i hm o eal o al asse s and eal o al e enue, ROE, p o i ma gin, and Tobin’s Q a e
eg essed on he pe cen age o emale di ec o s, i m and yea ixed e ec s, age, educa ion, and yea o
expe ience as boa d membe s. In addi ion, IV es ima ion is used o add ess endogenei y issues, and he
e ec o he gende di e si ica ion equi emen o he 2011 boa d o di ec o s’on boa d size and boa d
membe cha ac e is ics.
4.2.1. Desc ip i e Analysis
This s udy used desc ip i e analysis such as mean, pe cen age, - es , and g aph o show emale boa d
di ec o pa icipa ion, i m size, ROE, Tobin’s, and p o i ma gin p og ess. The esea che also checked
he pa icipa ion g ow h a e o emales in he boa d o di ec o s’posi ions o e he yea s. The
esea che compu es he g ow h a e G as de ined in Equa ion (4.1), whe e X
is he numbe o emale
di ec o s a yea and X
-1
is a yea be o e.
G¼X −X −1
ðX þX −1Þ=2
(4.1)
4.2.2. Econome ic analysis
Some esea che s ha e a gued ha so law is no e ec i e (Labelle e al., 2015). One o he cases
e e ed o in his ega d is he 2003 No way so law, which had li le e ec on emale pa icipa ion in
he boa d o di ec o s, as a esul , hey in oduced se ious sanc ions o non-complie s (ha d law) in
Table 1. Sampling selec ion.
Selec ion p ocedu es Numbe o i ms
The numbe o i ms in he O bis da abase 866
Fi ms wi h iden ical names in he Bu sa Malaysia and O bis da abase
o a ailable in bo h da abases a he ime da a managemen
692
Ag icul u e and nonp o i public o ganiza ion a e excluded (89)
Fi ms wi h missing In o ma ion a e excluded (174)
Final numbe o i ms 429
6 B.G. FIREW
2008. Fu he , he gende di e si ica ion equi emen o he boa d o di ec o s’has been se and suc-
ceeded mos ly in de eloped coun ies. Due o cul u al and eligious in luences, i is di icul o imple-
men such laws in Muslim domina ed coun ies (Syed & Van Bu en, 2014). As Malaysia’s 30 pe cen
women’s boa d o di ec o s equi emen a ge by 2016 ailed, hey limi ed he equi emen only o e y
la ge i ms. The e o e, he esea che in e es ed o ind ou i a so law o he Muslim domina ed and
de eloping coun y, Malaysia, has any in luence on women’s pa icipa ion in he boa d o di ec o s,
hough i didn’ achie e he 30 pe cen a ge . The desc ip i e s a is ics e ealed p og ess in he sha e
o emale di ec o s, pa icula ly a e he implemen a ion o he quo a equi emen in 2011.
Subsequen ly, o in es iga e he in luence o he 2011 quo a equi emen , Resea che ollowed a sligh ly
simila app oach o he s udy unde aken in Eu ope (Comi e al., 2017). They used an addi ional yea
and coun y dummy o con ol he shock ha is common o all coun ies and ime in a ian di e ence
ac oss coun ies. As his s udy ocuses only on Malaysia, i does no need yea and coun y dummies.
The ollowing eg ession equa ion was used o es ima e his in luence
Yi ¼aiþb1D1þei (4.2)
The dependen a iable (Y
i
) is emale pa icipa ion in boa d o di ec o s’posi ion, and i ’s cap u ed in
h ee ways. Fi s , i is measu ed by he pe cen age o emale di ec o s in yea . Second, dummy o
whe he i m has a leas one emale di ec o used o measu e emale pa icipa ion in he boa d o
di ec o s. Thi d, emale pa icipa ion is measu ed by a dummy mo e han o equal o 30 pe cen sha e
o emale di ec o s o no .
The independen a iable (D
1
) is he 2011 so law (Malaysia boa d o di ec o s’gende di e si y
equi emen ). I measu ed by a dummy a iable be o e o a e 2011. a
i
is i m ixed e ec and e
i
is he
e o e m. S anda d e o s a e clus e ed a he i m le el. Pooled OLS es ima ion was also used as an
al e na i e echnique.
To add ess he e ec o gende di e si ica ion o boa d di ec o s on i m pe o mance, ollowing
Ahe n and Di ma (2012), he esea che used ixed e ec and IV es ima ion echnique. The p e- eques
a ia ion o emale di ec o s ac oss i ms is used as an ins umen o cap u e he exogenous a ia ion
p opo ion o emale di ec o s o e ime in esponse o he implemen a ion o he gende di e si ica ion
equi emen o he boa d.
The pe cen age o emale boa d membe s in 2010 ( he yea be o e he gende quo a was se ) in e -
ac ed wi h yea dummies used as ins umen al a iables. The logic behind using i as an ins umen al
a iable is ha i ms wi hou emale di ec o s a e mo e likely o inc ease he numbe o emale di ec o s
han a e i ms wi h a leas 30% emale di ec o s o a leas one emale di ec o be o e he equi emen
is in oduced. I is impo an o acknowledge ha he p e- equi emen sha e o emale di ec o s was no
andomly selec ed. The e o e, esea che s should be conce ned abou he co ela ion be ween he p e-
equi emen pe cen age o emale di ec o s in 2010 and he subsequen change in i m pe o mance. To
check he exis ence o a co ela ion, he esea che compa e he cha ac e is ics o he 211 i ms wi h no
emale di ec o agains he 241 i ms wi h a leas one emale di ec o (see Table 2). Fo all i m pe o m-
ance measu emen s, he esul s showed no subs an ial di e ence be ween he wo se s o i ms.
Howe e , i ms wi h la ge membe s o he boa d o di ec o s a e mo e likely o ha e emale membe s.
Wi h ega d o he indus ial dis ibu ion di e ence be ween he wo se s o i ms, bo h se s o i ms a e
equally dis ibu ed among all sec o s and no s a is ically signi ican di e ence is ound. The use o he
i m ixed e ec cap u es ha i ms wi h la ge boa d o di ec o s a e mo e likely o ha e emale
di ec o s.
The e ec o he sha e o emale boa d membe s on i m pe o mance was es ima ed using he ol-
lowing equa ion:
Qi ¼aiþc þb1FDi þb2Di XþXs Xds(4.3)
The dependen Va iable (Q
i
) is he i m pe o mance measu emen such as, o al e enue, o al asse s,
p o i ma gin, ROE, and Tobin’s Q. Independen a iable (FD) is he pe cen age o emale di ec o s.
Consis en wi h he li e a u e in his a ea, numbe s o con ol a iables (D
i
X) a e included such as
backg ound o he boa d o di ec o s (age, expe ience, and educa ion), indus y speci ic ime ends
(Ps Xds), i m ixed e ec (a
i
), and yea ixed e ec (c
). In his speci ica ion, he i m ixed e ec
COGENT ECONOMICS & FINANCE 7
pa icipa ion a he decision-making le el. Rega ding educa ional quali ica ion, women a e mo e edu-
ca ed in Malaysia. Fo ins ance, in 2016, he sha e o emales wi h a leas i s deg ee was 12.3% while
ha o males was 10.3%, and as indica ed in Figu e A.2 in Appendix A, he uni e si y en olmen a e o
emales was g ea e han he males. Educa ional quali ica ion in Malaysia, he e o e, is no a ac o hin-
de ing women’s pa icipa ion in he boa d o di ec o s.
5.2.2. E ec o boa d di ec o ’s gende di e si ica ion on i m pe o mance
Table 7 p esen s he esul o he ixed e ec es ima e o he p e e ed speci ica ion o equa ion 4.3 o
he measu es o i m pe o mance conside ed, namely he loga i hm o o al asse s, he loga i hm o
o al e enue, p o i ma gin, ROE and Tobin’s Q. All columns include i m ixed e ec s, and yea ixed
e ec s, while columns 2, 4, 6, 8, and 10 ha e addi ional co a ian s such as indus y-speci ic ime ends
( he indus y classi ica ion is based on he 2-digi s le el o he NACE classi ica ion), i m le el con ols
(age, expe ience as boa d di ec o , and educa ion le el o boa d di ec o s) o each i m pe o mance
measu emen . Table 7 p esen s he esul s o he ixed e ec s es ima ion o he e ec o emale boa d
ep esen a ion on i m size. In con as , he s udy in case o No way concludes ha he pe cen age o
emale boa d di ec o s has a nega i e e ec on i m size. The coe icien s o he pe cen age o emale
di ec o s wi h ime and i m ixed e ec in column (1) and a e aking in o conside a ion o he a iables
such as indus y ime end and i m-le el con ols (educa ion, age, and expe ience) column (2) a e
nega i e and s a is ically signi ican . The esul s show ha 1% inc ease o emale di ec o s causes 0.2%
decline in o al asse s. Simila ly, a 1% inc ease o emale boa d di ec o s leads o 0.4% decline in o al
e enue. Howe e , a change in he pe cen age o emale di ec o s has no e ec on any o he h ee
al e na i e i m e iciency measu emen s (p o i ma gin, ROE, and Tobin’s Q). The co ac o s conside ed
(age, educa ion, expe ience, and indus y speci ic ime end) pa ially explain he gende -based gap in
i m pe o mance. A e conside ing he co ac o s in o conside a ion, he gende -based gap in o al
asse s declines om 0.3% o 0.2%, and he o al e enue declines om 0.5% o 0.4%.
Fo he IV es ima ion, he da a co e only he pe iod om 2011 o 2016, because, he a ia ion o
emale di ec o s ac oss i ms in 2010 is used as an ins umen o cap u e he exogenous change in he
sha e o emale di ec o s in esponse o he gende di e si ica ion equi emen in he boa d o di ec o s.
Fixed e ec s and IV es ima ion we e used o he pe iod 2011–2016. The i s -s age es ima ion esul s
show a ime-se ious ep esen a ion o women on he boa d o di ec o s. As an icipa ed, he sha e o
Table 7. E ec o he boa d o di ec o s’gende di e si ica ion on i m pe o mance ( ixed e ec es ima ion).
(a)
Va iable Log asse (1) (2) Log e enue (3) (4)
Pe cen o emale −.003 −.002−.005 −.004
(.002) (.002) (.002) (.002)
Fi m ixed e ec Yes Yes Yes Yes
Yea ixed e ec Yes Yes Yes Yes
Fi m le el con ol No Yes No Yes
Indus y-speci ic ime end No Yes No Yes
Obse a ion 4286 4286 4286 4286
Numbe o i ms 429 429 429 429
(b)
Va iable P o i Ma gin (5) (6) Tobin’s Q (7) (8) ROE (9) 10
Pe cen o −.47 −.41 .0003 .001 .14 .08
emale (.62) (.56) (.003) (.003) (.17) (.16)
Fi m ixed Yes Yes Yes Yes Yes Yes
e ec
Yea ixed Yes Yes Yes Yes Yes Yes
Fi m le el No Yes No Yes No Yes
con ol
Indus y No Yes No Yes No Yes
speci ic ime
end
Obse a ion 4286 4286 4286 4286 4286 4286
Numbe o 429 429 429 429 429 429
i ms
No e. The da a a e yea ly obse a ions o 2007–2016, signi ican a 1%, signi ican a 5%, and signi ican a 10%; he s anda d e o
is clus e ed a he i m le el.
14 B.G. FIREW
emale di ec o s in 2010 p edic ed a change in emale ep esen a ion on he boa d o di ec o s, implying
ha i ms wi h ewe o no emale di ec o s a e mo e likely o inc ease he numbe o emale di ec o s.
The es ima ion indica es ha he bigges adjus men o he pe cen age o emale di ec o s has occu ed
in he yea close o he deadline o he equi emen (2015 and 2016) (see Table 8).
Tables 9 and 10 show IV es ima es, and he esul con i med mos o he ixed e ec model es ima es.
Like ixed e ec model es ima es, IV es ima es e idenced ha he boa d gende di e si y has a nega i e
e ec on i m size ( o al asse s, and o al e enue) and he posi i e e ec on Tobin’s Q became s a is ic-
ally signi ican . A e aking he endogenei y issue in o conside a ion, he magni ude o he coe icien
becomes la ge. The esul is checked using he di e ence o he 2010 sha e o emale boa d di ec o s
om he 30% h eshold in e ac ing wi h he yea dummy, as an ins umen al a iable, and ob ained
iden ical esul wi h he abo e IV es ima e esul .
Following he s udy unde aken in he case o No way Ahe n and Di ma (2012), he esea che
checked he e ec o boa d o di ec o s gende di e si ica ion equi emen on boa d cha ac e is ics,
namely boa d size, expe ience, age, and educa ion (see Table 11). The IV es ima ion echnique was used
in a simila manne and he esul s shows ha he equi emen has no e ec on boa d size and educa-
ional le el. This implies ha equally quali ied emales eplaced male boa d membe s. Due o he imple-
men a ion o he gende di e si ica ion equi emen , expe ience as a boa d membe and age declined
signi ican ly. A 1% inc ease in he sha e o emale boa d di ec o s leads o 7% decline in expe ience as a
boa d di ec o . Also, a 1% inc ease in he sha e o emale boa d di ec o s leads o 8% decline in age,
implying ha he emale membe s joined he boa d we e less expe ienced and younge . The
Table 8. The i s s age eg ession.
Fi s s age eg ession: Dependen a iable ¼pe cen o emale di ec o
2012 dummy .88
(.24)
2013 dummy 2.55
(.39)
2014 dummy 3.5
(.46)
2015 dummy 4.7
(.54)
2016 dummy 5.74
(.61)
2012 dummy pe cen o emale di ec o 2010 −.07
(.03)
2013 dummy pe cen o emale di ec o 2010 −.17
(.04)
2014 dummy pe cen o emale di ec o 2010 −.22
(.04)
2015 dummy pe cen o emale di ec o 2010 −.27
(.04)
2016 dummy pe cen o emale di ec o 2010 −.33
(.04)
Fi m ixed e ec s Yes
F-S a is ics 9.8
Obse a ion 2570
No e. The da a a e yea ly obse a ions om o 2011–2016, he yea 2011 is omi ed, and he s anda d
e o is clus e ed a he i m le el. The se o ins umen s in he i s s age is he ini ial sha e o emales
on boa d in e ac ed wi h yea dummies. signi ican a 10%, 5%, 1%.
Table 9. The e ec o boa d o di ec o s’gende di e si ica ion equi emen on i m pe o mance ( ixed e ec and IV
es ima ion, based on sub-sample o 2011–2016).
Log asse Log e enue P o i ma gin
Va iable Fixed e ec IV Fixed e ec IV Fixed e ec
Pe cen o −.003 −.01 −.004−.01−.73
Female (.002) (.005) (.002) (.006) (1.03)
Fi m ixed e ec Yes Yes Yes Yes Yes
Yea ixed e ec Yes Yes Yes Yes Yes
Obse a ion 2570 2570 2570 2570 2570
Numbe o 429 429 429 429 429
i ms
COGENT ECONOMICS & FINANCE 15
educa ional gap was s a is ically and economically insigni ican . As discussed in he desc ip i e sec ion,
newly joined emale di ec o s a e mo e quali ied (age, expe ience, and Educa ion) han exis ing emale
di ec o s. On a e age, emale membe s who eplace men a e less expe ienced and younge han men
boa d di ec o s. The gende di e si ica ion equi emen in he boa d o di ec o s, he e o e, has a nega-
i e e ec on age and expe ience as a boa d di ec o , whe eas, i has no e ec on educa ional le el, and
he gende -based boa d membe s’educa ional gap has declined o e ime, pa icula ly a e he e o m.
Ye , based on he WB da a, since 1998 in Malaysia, he majo i y o s uden s in uni e si ies ha e been
gi ls, a ailing educa ed women o posi ions such as he boa d o di ec o s.
The esea che examined he he e ogeneous e ec o he gende di e si ica ion equi emen o he
boa d o di ec o s’among di e en g oups o i ms. Fi s , esea che in es iga es whe he he gende
di e si ica ion equi emen has an asymme ic e ec among sec o s. As pe he desc ip i e esul , he e
is no e idence o a sec o -based esponse di e ence o he gende di e si ica ion equi emen in he
boa d o di ec o s. These sec o s we e ca ego ized in o ou g oups. Based on he In e na ional S anda d
Indus y classi ica ion (ISI ReV.2), he manu ac u ing sec o is ca ego ized in o wo –medium and highe
echnology-in ensi e manu ac u ing sec o (Chemicals, ubbe , plas ics, non-me al p oduc , machine y,
equipmen , u ni u e, ecycling, me als and me al p oduc s); And lowe echnology-in ensi e manu ac u -
ing sec o (Food, be e age, obacco, ex iles, wea ing appa el, lea he , wood, co k, and pape ). The se -
ice sec o is also classi ied in o wo –cons uc ion and enginee ing ela ed se ices, and o he se ice
sec o s (gas, elec ic, wa e , ho el, es au an , publishing, p in ing, anspo , wholesale, e ail ade, and
o he se ices). As indica ed in Table A.1 in Appendix A, he e is no di e ence among he ou g oups o
sec o s in esponding o he gende di e si ica ion equi emen .
The esul in Table 12 shows ha he gende di e si ica ion equi emen o he boa d o di ec o s has
asymme ic e ec s be ween sec o g oups. Gende di e si ica ion equi emen o he boa d o di ec o s
has a nega i e e ec on i m size measu emen s ( o al e enue and o al asse s) in he high echnology-
in ensi e manu ac u ing sec o , while i has no e ec in o he sec o s (cons uc ion, o he se ice sec o s,
less echnology-in ensi e manu ac u ing sec o s). A 1% inc ease in he sha e o emale boa d di ec o s,
due o he boa d o di ec o s’gende di e si ica ion equi emen , leads o a ound 3.1% decline in o al
asse s in high echnology in ensi e manu ac u ing sec o han se ice and less echnology-in ensi e
Table 11. The e ec o Boa d Di ec o s’gende di e si ica ion on i m cha ac e is ics.
Ins umen al a iable es ima ion
Va iable Boa d size Age Expe ience Educa ion
(1) (2) (3) (4)
Pe cen o emale .002 −.08 −.07 .0003
(.01) (.04) (.03) (.002)
Fi m ixed e ec Yes Yes Yes Yes
Yea ixed e ec Yes Yes Yes Yes
Obse a ions 429 429 429 429
No e. Da a a e yea ly obse a ion o 2011–2016, se o ins umen s in he i s s age is he ini ial sha e o emale di ec o s in e ac ed wi h
yea dummies. signi ican a 10%, 5%, 1%.
Table 10. The e ec o boa d o di ec o s’gende di e si ica ion equi emen on i m pe o mance ( ixed e ec and IV
es ima ion, based on sub-sample o 2011–2016).
Va iable P o i ma gin ROE Tobin’sQ
IV Fixed IV Fixed IV
E ec E ec
Pe cen o 8.62 .26 −4.32 .002 .01
emale (11.8) (.34) (3.53) (.003) (.01)
Fi m ixed Yes Yes Yes Yes Yes
e ec
Yea ixed Yes Yes Yes Yes Yes
e ec
Obse a ion 2570 2570 2570 2570 2570
No o i m 420 420 420 420 420
No e. Da a a e yea ly obse a ion o 2011–2016, signi ican a 1%, signi ican a 5%, and signi ican a 10%; he s anda d e o clus-
e ed a he i m le el.
16 B.G. FIREW
manu ac u ing sec o s. The esea che ound no sec o -based di e ence in he e ec o gende di e si i-
ca ion equi emen in he boa d o di ec o s in he wo i m e iciency measu emen s (p o i ma gin and
ROE). In e ms o Tobin’s Q, an addi ional emale boa d o di ec o s has a posi i e e ec on high- ech-
nology- in ensi e sec o s, while i has no e ec on he se ice sec o .
Second, his s udy examines, he po en ial asymme ic e ec among i ms in di e en compe i ion
g oups. The He indahl index (HHI) was used o classi y i ms in e ms o compe i ion, and he 2007 o al
e enues we e used o calcula e HHI. The i ms a e classi ied in o h ee g oups based on he alue o
HHI –obse a ion below 1/3, be ween 1/3 and 2/3, and abo e 2/3 pe cen ile o HHI, i ms wi h HHI
g ea e han 1047.336 a e conside ed high concen a ion, hose wi h HHI be ween 921.6693 and
1047.336 a e classi ied as mode a e concen a ion, and hose wi h HHI less han 921.66931 a e consid-
e ed good compe i ion. The o mula o calcula e he HHI is he sum o he squa e o each sec o pa ici-
pan ’s ma ke sha e (measu ed in e ms o o al e enue). The esul s in Tables 13 and 14 show ha he
gende di e si ica ion equi emen o he boa d o di ec o s has an asymme ic e ec among a g oup o
i ms ca ego ized by compe i ion. The gende di e si ica ion equi emen o he boa d o di ec o s has a
nega i e e ec on i m size in he sec o s wi h good compe i ion, while i has no e ec on o he g oups.
The esul o o al e enue is also s a is ically signi ican a 15% p- alue. A 1% inc ease in he sha e o
emale boa d di ec o s, due o he boa d o di ec o s’gende di e si ica ion equi emen , leads o
a ound 3.4% decline in o al asse s o i ms in good compe i ion g oup han i ms in mode a e compe i-
ion and high concen a ion g oups. In e ms o Tobin’s Q, addi ional emale di ec o has a posi i e
e ec on i ms in good compe i ion g oup, and nega i e e ec on i ms in he mode a e and high con-
cen a ion g oups. The e is no compe i ion-based di e ence in he e ec o gende di e si y equi e-
men s o he boa d o di ec o s on he o he wo i m e iciency measu emen s.
The esea che examined he po en ial asymme ic e ec among i ms in di e en size g oups (la ge
and e y la ge i ms). In his s udy, ollowing he O bis da abase i m size classi ica ion, i ms wi h
Table 12. The e ec o boa d di ec o s’gende di e si ica ion equi emen on i m pe o mance ac oss sec o s.
Ins umen al a iable es ima ion
Va iable Log asse (1) Log e enue (2) P o i ma gin (3) ROE (4) Tobin’s Q (5)
Pe cen o emale −.031 −.02627.04 −13.9 .036
di ec o (.01) (.02) (29.83) (9.06) (.02)
Pe cen o emale .029 .021 −27.96 13.31 −.038
di ec o O he se ice (.01) (.02) (29.97) (9.1) (.02)
Pe cen o emale .027 .0328 −27.05 13.67 −.042
di ec o (01) (.02) (30.91) (9.39) (.02)
Cons uc ion
Pe cen o emale .027 .0255−23.64 16.87−.025
di ec o less (.01) (.02) (30.08) (9.14) (.02)
echnology
in ensi e
Yea ixed e ec Yes Yes Yes Yes Yes
Fi m ixed e ec Yes Yes Yes Yes Yes
Obse a ion 2567 2567 2567 2567 2566
No e. Da a a e yea ly obse a ion o 2011 o 2016. se o ins umen s in he i s s age is he 2010 sha e emales on boa d in e ac ed wi h
yea dummies. The highe echnology in ensi e sec o is a e e ence ca ego y, signi ican a 10%, 5%, 1%.
Table 13. The e ec o he boa d o di ec o s’gende di e si ica ion equi emen on i m pe o mance ac oss g oups
o i ms classi ied by compe i ion.
Ins umen al a iable eg ession
Va iable Log asse (1) Log e enue (2) P o i ma gin (3) ROE (4) Tobin’s (5)
Pe cen o emale −.034 −.026 25.7 −10.75 .038
di ec o (.01) (.02) (35.4) (10.71) (.02)
Pe cen o emale .03 .02 −27.4 10.08 −.041
di ec o high concen a ion (.01) (.01) (35.5) (10.75) (.01)
Pe cen o emale .03 .025 −26.5 10.5 −.041
di ec o mode a e concen a ion (.01) (.02) (35.5) (10.8) (.02)
Yea ixed e ec yes yes yes yes Yes
Fi m ixed e ec yes yes yes yes yes
Obse a ion 2569 2569 2569 2569 2569
No e. Da a a e yea ly obse a ion o 2011–2016. se o ins umen s in he i s s age is he 2010 sha e emales on boa d in e ac ed wi h
yea dummies. Good compe i ion is a e e ence ca ego y, signi ican a 10%, 5%, 1%.
COGENT ECONOMICS & FINANCE 17
ope a ing e enue g ea e han o equal o 130 million USD in 2011 we e g ouped in o e y la ge i ms.
As expec ed, e y la ge i ms a e mo e likely o espond o gende di e si ica ion equi emen s han
la ge i ms. P io o he gende di e si ica ion equi emen , e y la ge i ms had a lowe sha e o emale
di ec o s han la ge i ms, whe eas hey had a highe sha e o emale di ec o s a e he di e si ica ion
equi emen (see Table A.3 in Appendix A). The indings did no show he asymme ic e ec o he gen-
de di e si ica ion equi emen o he boa d o di ec o s on i m pe o mance ac oss di e en i m sizes
(see Table 14).
The esea che a emp s o iden i y whe he he di e ence in boa d membe s’cha ac e is ics o hese
g oups o i ms may lead o he he e ogeneous e ec o he gende di e si ica ion equi emen o he
boa d o di ec o s on i m pe o mance. Fi s , he esea che examined he di e ence in cha ac e is ics
be ween hese g oups o i ms be o e and a e he gende di e si y equi emen . Second, he esea che
in es iga ed he he e ogeneous e ec o he gende di e si ica ion equi emen o he boa d o di ec o s
on boa d cha ac e is ics among di e en g oups o sec o s and i m sizes.
As depic ed in Tables A.1,A.2 and A.3 in Appendix A, boa d membe cha ac e is ics a e simila
ac oss di e en g oups o sec o s and show simila ends o e ime. Boa d membe s in a e y la ge
i m a e olde , mo e educa ed, and mo e expe ienced han hose in la ge i ms, whe eas he wo
g oups o i ms ha e pa allel ime ends. The e o e, he he e ogeneous e ec o gende di e si ica-
ion equi emen s on i m pe o mance by sec o is no due o di e ences in he cha ac e is ics o
boa d membe s. The IV es ima ion esul also shows no e idence o a he e ogeneous e ec o he
gende di e si ica ion equi emen o he boa d o di ec o s on boa d cha ac e is ics among di e en
g oups o sec o s. Howe e , in i ms wi h good compe i i e s a us, he gende di e si ica ion equi e-
men o he boa d o di ec o s esul s in less expe ienced and younge boa ds o di ec o s encum-
be ing he posi ion. Thus, he ac s ha less expe ienced and younge emale di ec o s join he
boa d migh be a possible eason o he nega i e e ec gende di e si ica ion equi emen o he
boa d o di ec o s on i m size (see Table 15).
Gene ally, his s udy esul shows boa d o di ec o s’gende di e si y has no s a is ically signi ican
e ec on i m pe o mance. The nega i e e ec o gende di e si y on i m size is only o i ms in highe
echnology-in ensi e sec o s and wi h good compe i i e s a us. Fo i ms wi h good compe i i e s a us,
he gende di e si ica ion equi emen leads less expe ienced and younge boa d di ec o s o encumbe -
ing he posi ion. So he eason o he nega i e e ec o gende di e si y on i m size, i ms in good
compe i ion s a us, is ela ed o less expe ience and age o new emale boa d di ec o s. The majo i y
esul s o his s udy p o ide suppo o H1a, as well as simila indings o pas s udies (Eckbo e al.,
2016; Fe a i e al., 2022; Ma ino a e al., 2016; Ma quez-Ca denas e al., 2022). O e all, his s udy’s
esul s indica e ha he equi emen o gende di e si y among boa d di ec o s posi i ely a ec s he
quali ica ions o emale boa d di ec o s wi hou a ec ing hose male boa d membe s. In addi ion, gen-
de di e si y does no a ec i m pe o mance o he majo i y sec o s. So he policy make needs o
ake in o conside a ion he posi i e e ec o boa d di ec o s’gende di e si y on he quali ica ion o
emale boa d di ec o s and he asymme ic e ec o gende di e si y on i m size in highe echnology-
in ensi e and less echnology-in ensi e sec o s.
Table 14. The e ec o he boa d o di ec o s’gende di e si ica ion equi emen on i m pe o mance ac oss la ge
and e y la ge i ms.
Ins umen al a iable es ima ion
Va iables Log asse (1) Log e enue (2) P o i ma gin (3) ROE (4) Tobin’s Q (5)
Pe cen o emale −.01 −.01211.43 −5.34 .01
Di ec o (.01) (.01) (14.46) (4.36) (.01)
Pe cen o .01 .01 −12.66 4.53 −.02
Female di ec o (.01) (.01) (14.96) (4.51) (.01)
Fi m size
Yea ixed e ec yes yes yes yes yes
Fi m ixed e ec yes yes yes yes yes
Obse a ion 2569 2569 2569 2569 2569
No e. The da a a e yea ly obse a ions o 2011–2016. Se o ins umen s in he i s s age is he 2010 sha e o emales on boa d in e ac ed
wi h yea dummies. signi ican a 10%, 5%, 1%.
18 B.G. FIREW
6. Robus ness o he esul
To in es iga e he obus ness o he e ec o he boa d o di ec o s’gende di e si y equi emen on
he sha e o emale boa d di ec o s, h ee al e na i e sha e emale boa d o di ec o s’measu emen s
used: a leas one emale di ec o , pe cen age o emale boa d o di ec o s, and a leas hi y pe cen
emale di ec o s. In addi ion, pooled OLS es ima ion is also used. The esul ob ained om pooled OLS
es ima ion is he same as ha ob ained om he ixed e ec es ima ion. S a is ically signi ican and posi-
i e impac o emale boa d o di ec o s’gende di e si y equi emen on he pe cen o emale boa d
di ec o s, a leas one emale boa d di ec o , and a leas hi y pe cen emale boa d di ec o s, he eby
implying he esul is ai ly obus (see Table 6).
To in es iga e he obus ness o he e ec o he boa d o di ec o s’gende di e si y on i m pe o m-
ance wo al e na i e econome ic models a e used such as ixed-e ec and Ins umen al Va iable (IV)
es ima ion echniques. The ixed-e ec s eg essions do no ake in o accoun he p esence o possible
non-mono onic associa ions. This indica es ha he esul s may be inco ec . As a esul , he esea che
in es iga es he obus ness o indings o he exis ence o po en ial non-linea ela ionships, and endo-
genei y p oblems. To accoun o po en ial addi ional endogenei y p oblems ha may be caused by
omi ed a iable bias, he Ins umen al Va iable (IV) me hod applied. The esul s ob ained om he
ixed-e ec and IV es ima ion a e consis en (see Tables 9 and 10). The e by indica e ha he esul s a e
no sensi i e o endogenei y p oblem ha may be caused by po en ial omi ed a iables. The obus ness
analyses indica e ha he esul s o his s udy a e ai ly obus o po en ial endogenei y p oblems.
In addi ion, wo al e na i e i m size measu emen s a e used: he na u al loga i hm o e enue and
asse s. The esul s ob ained om wo al e na i e i m size measu emen s a e consis en . P o i ma gin,
Tobin, and ROE a e among he h ee al e na i e measu emen s used o measu e i m e iciency. The
esul s ob ained om h ee al e na i e e iciency measu emen s a e consis en . The e o e, i implies ha
esul s a e ai ly obus when using log e enue o log asse s as a i m size measu e, and when using
p o i ma gin, Tobin, and ROE as i m e iciency measu es.
Table 15. The e ec o he boa d o di ec o s’gende di e si ica ion equi emen on boa d cha ac e is ics ac oss sec-
o s and g oups o i ms based on sec o s compe i ion s a us.
Ins umen al a iable es ima ion
Age Educa ion Expe ienceAge Educa ion Expe ience
Va iable (1) (2) (3) (4) (5) (6)
Pe cen o −.07 .004 −.11 −.22−.003 −.16
emale di ec o (.11) (.01) (.07) (.13) (.01) (.08)
Pe cen o −.04 −.01 .07
emale di ec o (.11) (.01) (.07)
o he se ice
Pe cen o .1 −.002 .06
emale di ec o (.11) (.01) (.07)
cons uc ion
Pe cen o .03 −.003 .05
emale (.11) (.01) (.07)
di ec o less
echnology
in ensi e
Pe cen o .15 .005 .12
emale (.13) (.01) (.08)
di ec o high
concen a ion
pe cen o .21 .004 .13
emale (.13) (.01) (.08)
di ec o
mode a e
concen a ion
Yea ixed Yes Yes Yes Yes Yes Yes
e ec
Fi m ixed Yes Yes Yes Yes Yes Yes
e ec
Obse a ion 2567 2567 2567 2569 2569 2569
COGENT ECONOMICS & FINANCE 19
7. Summa y and conclusion
This esea ch deals wi h he ela ionship be ween he gende di e si ica ion o he boa d o di ec o s
and i m pe o mance in Malaysia. Malaysia is a de eloping coun y wi h high gende inequali y ha
implemen so law gende di e si y equi emen o he boa d o di ec o s. This s udy ocuses on he
in luence o Malaysia’s 2011 gende di e si y equi emen o he boa d o di ec o s on he sha e o
emale di ec o s, and i s e ec on i m pe o mance and boa d membe cha ac e is ics. Based on 429
la ge and e y la ge sample i ms a ailable in bo h he O bis da abase and he Bu sa Malaysia s ock ma -
ke exchange o he pe iod 2007–2016, he ixed e ec es ima e and ins umen al a iable we e used o
in es iga e he gende di e si ica ion equi emen o boa d o di ec o s on i m pe o mance. The pe -
cen age o emale boa d membe s in 2010 in e ac ed wi h yea dummies was used as an ins umen al
a iable.
The esul s show ha Malaysia gende di e si ica ion equi emen o he boa d o di ec o s has a
posi i e in luence on he sha e o emale di ec o s in la ge and e y la ge i ms. In addi ion, women
we e appoin ed o he boa ds pos equi emen s we e obse ably mo e quali ied han hei emale p ed-
ecesso s in many dimensions. The esea che also examined whe he he imp o emen in emale pa ici-
pa ion in he boa d o di ec o s a e 2011 in Malaysia is due o ei he he gende quo a equi emen o
hei quali ica ions and ound ha he p og ess in emale pa icipa ion is he esul o he quo a equi e-
men . Du ing he pe iod unde conside a ion, educa ional quali ica ions did no show p og ess; and
emale pa icipa ion in senio le el managemen , middle le el managemen , and pa liamen sea s did
no show imp o emen ha could be compa able wi h ha o he sha e o emale boa d o di ec o s.
Al hough emale pa icipa ion in boa d o di ec o s has imp o ed owing o he gende quo a equi e-
men , 35% o i ms a e wi hou a leas one emale boa d o di ec o s. Resea che s ha e a gued ha cul-
u al and eligious iews a e among he ac o s ha hampe he gende di e si ica ion equi emen o
boa d o di ec o s. Fu he , he women’s boa d o di ec o s epo ed ha hey ea ned less espec om
supe iso s and manage s.
The esul s u he e eal ha he gende di e si ica ion o he boa d o di ec o s has a nega i e
e ec on i m size ( o al e enue, and o al asse s), while i has no e ec on i m e iciency measu e-
men s (Tobin’s Q, ROE, and p o i ma gin). Malaysia gende di e si ica ion equi emen o boa d o
di ec o s has a nega i e e ec on he age and expe ience o boa d membe s as di ec o s, whe eas, i
has no e ec on boa d size and boa d membe educa ional le el. A compa ison by sec o and com-
pe i ion s a us indica es ha he gende di e si ica ion equi emen o boa d o di ec o s has an
asymme ic e ec on i m pe o mance. The inc ease in he numbe o emale di ec o s has a nega-
i e e ec on i m size ( o al e enue, and o al asse s) in mo e echnology in ensi e sec o s and sec-
o s wi h good compe i i e s a us while i has no e ec on o he sec o s. The inc ease in he
pa icipa ion a e o emale o di ec o s has a posi i e e ec on mo e echnology-in ensi e manu ac-
u ing sec o s and sec o s wi h good compe i ion s a us in e ms o Tobin’s Q, whe eas i has a nega-
i e e ec on o he sec o s. The e is no asymme ic e ec by sec o o sec o compe i ion s a us in
he o he i m e iciency measu emen s. In addi ion, he esea ch did no show an asymme ic e ec
o gende di e si ica ion equi emen he boa d o di ec o s on mos i m pe o mance measu e-
men s by i m size.
Conside ing hese indings, Malaysia may bene i om he implemen a ion o policy measu es. As all
he cul u al, and eligious iews lead o he keen obs uc ion o implemen ing gende di e si ica ion o
he boa d o di ec o s, which conside s child ca e as he majo women’s esponsibili y, in oducing poli-
cies ha suppo amilies wi h child en (p o ision o child ca e se ice, ma e ni y lea e, ea ly elease o
women wi h child en, lexible wo king a angemen s, elecommu ing, and b eas eeding policies) a e
c ucial o imp o ing women’s pa icipa ion in he wo k o ce. Fu he mo e, in oducing p og ams ha
imp o e socie y’s pe cep ion o women’s capabili ies may help gain manage s’con idence and espec
o emale di ec o s. Since educa ed women a e su icien ly a ailable on he ma ke in Malaysia, he gap
in expe ience, o b ing women o decision making le els, may be illed h ough aining. In addi ion, pol-
icy make needs o ake in o conside a ion he posi i e e ec boa d di ec o s’gende di e si y on quali-
ica ion o emale boa d di ec o s and asymme ic e ec o gende di e si y on i m size o highe
echnology in ensi e and less echnology in ensi e sec o s.
20 B.G. FIREW
Fu u e esea ch can in es iga e he e ec o Malaysia 2017 he gende di e si ica ion equi emen o
he boa d o di ec o s o e y la ge i ms on i m pe o mance.
Acknowledgmen
This a icle submi ed a pa ial ul illmen o he equi emen s o he deg ee o Doc o o Philosophy in Economics
a he Uni e si y o Milan and Pa ia, I aly. This a icle was de eloped unde he supe ision o P o esso Tommaso
F a ini and P o esso Aga a Maida. Ex e nal and in e nal commi ees we e also e alua ed his s udy.
Au ho con ibu ions
This a icle has sing au ho . All ac i i ies like da a managemen , li e a u e e iew, esea ch design, da a analysis, and
In e p e a ion unde ake by D . Banchayehu Gi ma Fi ew unde he supe ision o he ad iso (P o esso Tommaso
F a ini and P o esso Aga e Maida).
Disclosu e s a emen
No po en ial con lic o in e es was epo ed by he au ho (s).
Abou he au ho
Banchayehu Gi ma Fi ew (Ph.D) is an assis an p o esso a he Debi e Bi han Uni e si y, Debi e Bi han, E hiopia.
She specializes in de elopmen al economics. The au ho has published h ee pape s on gende and de elopmen .
Da a a ailabili y s a emen
Da ase analyzed in his s udy a e a ailable upon eques .
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e al pe cep ions and co po a e go e nance in eme ging ma ke s. S a egic Managemen Jou nal,37(3), 466–476.
h ps://doi.o g/10.1002/smj.2352
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22 B.G. FIREW
Appendix A. Gende Di e si y and Fi m Pe o mance: E idence om Malaysia
Boa d ooms
Figu e A.2. Te ia y en olmen a e based on gende .
Figu e A.3. Sha e o emales in senio and middle-le el managemen , and pa liamen . No e. Based on UNDP epo o
Malaysia o he pe iod 2010–2016.
Figu e A.1. Female pa icipa ion in Boa d o Di ec o s le el end ela ed o gende di e si ica ion equi emen .
COGENT ECONOMICS & FINANCE 23
