Women’s Participation in Firms’ Management and Their Impact on Financial Performance: Pre-COVID-19 and COVID-19 Period Evidence

Abstract

At a time when gender equality is a key priority of all international organizations, this paper can be considered a remarkable contribution to the role of women executives in firms’ performance. More specifically, this study focuses on the effect of women holding positions of responsibility on firms’ performance worldwide. For the purposes of our research, we applied cross-sectional and panel data analysis for all sectors at an international level from 2019, the year preceding the breakout of the pandemic crisis, to 2021, while the indicators used to measure the participation of women in executive positions are classified as ESG indices. The empirical analysis findings end up showing that the participation of women in executive positions positively affects firms’ performance over time, while there is no material change observed before and during the COVID-19 pandemic period. More specifically, when the percent of women processing job positions of responsibility increases by 10%, then the index of profitability will increase from 1.4% to 1.8%, regardless of the measurement of female participation in executive positions used. The results of this study constitute a remarkable contribution to the promotion of the creative economy, the progress of societies, and sustainable development. The research’s outcome can be primarily used by policymakers drawing up policies for achieving gender equality in the labor market and workplaces and by shareholders and firms’ managers in order to trust females in executive positions in favor of their firms’ financial performance. The current study is unique in that it focuses on the period before and during the COVID-19 period, as a period of high volatility in economic activity worldwide, while the sample includes firms from large and mid-cap companies belonging to developed and emerging markets. The above approach will contribute to providing more credible information related to the role of women executives in firms’ performance.