Female Directors and Investment Efficiency: New Evidence from an Emerging Market

Abstract

Prior studies show that the effect of female directors on corporate investment efficiency is mixed. This article investigates this relationship in a weak corporate governance setting. With a data of 4,653 firm-years from 582 firms listed in Vietnam during the period 2009–2020, we find that female directors decrease corporate investment efficiency through increasing underinvestment and they have no significant effect on overinvestment. Moreover, the negative relationship between female directors and investment efficiency is stronger in state-owned firms.