An empirical study on the impact of female leaders and intellectual capital on the financial performance of FTSE 350 companies

Javaherizadeh, Elham (2021) An empirical study on the impact of female leaders and intellectual capital on the financial performance of FTSE 350 companies. Doctoral thesis, University of West London.

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Abstract

The aim of this research is to examine to what extent female leaders and intellectual capital (IC) affected the financial performance of FTSE 350 companies in the UK for the period 2010 to 2018 while controlling for firm-specific characteristics. To achieve the research aim and answer the research questions, three empirical models were developed based on a review of the existing literature in order to test the research hypotheses. The objective of the first empirical study is to examine the impact of female leaders on FTSE 350 companies’ financial performance. The objective of the second empirical study is to investigate the impact of IC on FTSE 350 companies’ financial performance, the purpose of the third empirical study is to investigate the impact of female leaders on FTSE 350 companies’ intellectual capital.
The research used OLS multivariate regression models with a time lag. The data relating to female leader’s characteristics, IC components and financial performance of FTSE 350 companies were collected from the database developed by Osiris.
The intellectual capital of FTSE 350 companies is measured through value added intellectual coefficient (VAIC) methodology.
The following are the key findings of the research. Firstly, there is no disparity between female and male leaders affecting financial performance. Secondly, female leaders present a positive impact on the financial performance (Tobin’s Q and ROA) of specific industries, such as industrials, consumer staple and consumer discretionary. Thirdly, IC presents a positive impact on financial performance, such as ROA and P/E. On the other hand, female chairs demonstrate a positive impact on selected companies’ intellectual capital throughout the years which proves that the higher position they achieve, the more positive impact they have on companies’ performance.
The study contributes to the literature of board of directors, specifically female leaders and financial performance, by adding to the body of knowledge regarding the significant impact of female leaders on financial performance in specific industries, such as industrials, consumer staple and consumer discretionary. In fact, the industry factor might better explain why the results on the relationship between female leaders and firm performance vary. This can fortify the gender legislation around the world, which pressurise firms to increase female representation on boards.
Moreover, the current study enhances the existing literature regarding female leaders and intellectual capital by being the first study to report the positive impact of female leaders on the intellectual capital of FTSE 350 companies. IC is an important driver of value creation and competitive advantage for firms; however similar to the industry factor, this relationship is not well understood yet. Therefore, the findings of this study support the representation of female members on boards, as it is related to improved IC and, consequently, performance. As part of this process, the relationship between female leaders and the industry should not be neglected as the relationship remains significant.
This study provides useful and practical insights into how both managers and investors can help the female members better understand and interpret firms' intellectual capital. Before this study, most research focused on the relationships between female directors and firm performance without considering the role of industry or intellectual capital, which indeed are crucial.
Having said that, there are still more factors to be considered, such as culture, country, legal system, equality, inclusivity and other forms of diversity such as ethnic, race, sexual orientation and social class, which further research can investigate.

Item Type: Thesis (Doctoral)
Subjects: Business and finance > Business and management > Culture and leadership
Business and finance
Depositing User: Elham Javaherizadeh
Date Deposited: 22 Dec 2021 14:33
Last Modified: 22 Dec 2021 14:33
URI: http://repository.uwl.ac.uk/id/eprint/8511

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