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Diversity and Career Prospects Up the Corporate Ladder

Paper Session

Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)

Manchester Grand Hyatt, Gaslamp AB
Hosted By: Association of Financial Economists
  • Chair: Natalia Reisel, Fordham University

Diversity in Corporate Teams

Anzhela Knyazeva
,
U.S. Securities and Exchange Commission
Diana Knyazeva
,
U.S. Securities and Exchange Commission
Lalitha Naveen
,
Temple University

Abstract

This paper surveys the extant research on board diversity. What role does diversity of board members play in board governance and how does it affect the board’s advising and monitoring roles? First, we discuss how the literature has approached the role of the board and present stylized facts and time trends in board diversity. Second, we consider the dimensions of diversity that may impact a board’s effectiveness. Third, we discuss the determinants of board diversity. Finally, we assess research on the effects of board diversity on firm performance and outcomes. We discuss how endogeneity issues pose a challenge in studying the impact of diversity on firm value, and how existing studies have sought to address this challenge. We conclude with a discussion of broader implications of existing research on board diversity and suggestions for future research.

Diversity in Hollywood: Do Gender and Age Affect Film Directors’ Careers?

Shu Han
,
Yeshiva University
S. Abraham Ravid
,
Yeshiva University

Abstract

The paper uses data on the career progression of movie directors to study whether or not there is (statistical) discrimination in the movie industry. The conceptual exercise is to compare two directors who differ in age and gender but otherwise have had an identical career path and ask whether or not they are equally likely to be hired again in the industry. From previous work we know that film directors’ success is strongly correlated with the returns on previous projects and with the quality of critical reviews. In this paper we assemble a data base of all directors who started their careers between 1995 and 2015 and we test how age and gender affect their probability of making another film. We find that age and female gender may have a negative effect on the probability of being hired for a new project.

Lehman Sisters

Renee Adams
,
Oxford University
Vanitha Ragunathan
,
University of Queensland

Abstract

Based on documented population gender differences in risk aversion, some argue the crisis would not have happened if Lehman Brothers had been Lehman Sisters. Such generalizations from the population ignore the role of selection. We illustrate the importance of selection by comparing finance to other industries. Using measure of preferences, we show that gender gaps in risk-aversion can reverse in finance. Consistent with the existence of selection, financial firms with more female directors are, if anything, relatively riskier than non-financials. While diversity may be valuable in a crisis, taking selection into account may be critical for identifying the reasons why.
Discussant(s)
Will Gornall
,
University of British Columbia
Jungmin Kim
,
Hong Kong Polytechnic University
Rick Townsend
,
University of California-San Diego
JEL Classifications
  • G3 - Corporate Finance and Governance
  • J7 - Labor Discrimination