Women As Drivers Of Japanese Firms Success: The Effect Of Women Managers And Gender Diversity On Firm Performance

Abstract

While various theoretical arguments have been constructed that imply that a firm would see improved financial performance by increasing the proportion of women managers, previous studies on the issue, in Japan and elsewhere, have shown mixed results. Using data from Toyo Keizai and Nikkei NEEDS on 745 Japanese-listed companies, the authors investigate the impact of womens managerial participation and, more generally, overall workplace and managerial gender diversity on corporate performance. They find a robust significant positive relationship between firm performance and both female manager ratio and gender diversity, after controlling for industry, firm size, capital structure, corporate governance, and compensation policy. This relationship also exhibits substantial nonlinearity, with the benefit decreasing as the proportion of women managers or managerial gender diversity increases.