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Nadeem, Muhammad; Farooq, Muhammad Bilal; Ahmed, Ammad

Does female representation on corporate boards improve intellectual capital efficiency?

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  • Media type: E-Article
  • Title: Does female representation on corporate boards improve intellectual capital efficiency?
  • Contributor: Nadeem, Muhammad; Farooq, Muhammad Bilal; Ahmed, Ammad
  • imprint: Emerald, 2019
  • Published in: Journal of Intellectual Capital
  • Language: English
  • DOI: 10.1108/jic-01-2019-0007
  • ISSN: 1469-1930
  • Origination:
  • Footnote:
  • Description: <jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The purpose of this paper is to analyse the relationship between female representation on corporate boards and intellectual capital (IC) efficiency – while prior studies focus on the relationship between gender diversity and firms’ financial performance.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>Drawing on data from top 500 UK listed firms for 2007–2016 (3,279 firm-years), this study employs an adjusted-value-added intellectual coefficient as a measure of IC efficiency. Further, the two-step system-generalised method of moments has been applied to account for endogeneity issues.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>The results reveal a significant positive relationship between female representation on boards and IC efficiency, including human capital, structural/innovation capital and financial capital efficiency. These results are robust to alternative proxies for the independent variable and difference-in-difference estimation.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Practical implications</jats:title> <jats:p>The results posit that female representation on boards is associated with IC efficiency, which is vital for firms’ value creation and competitive advantage in the knowledge-economy era. The study also endorses current legislation to increase female representation on corporate boards.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>This is among the limited studies to explore the role of female representation on boards in IC efficiency – while most prior studies relate IC efficiency to financial performance.</jats:p> </jats:sec>