Institutional investment patterns in gender-diverse firms.
Description
This paper examines the relationship between board gender diversity and institutional ownership. It finds that firms with more gender-diverse boards tend to have lower institutional holdings, with similar patterns across banks, insurance-related institutions, and mutual funds.
The paper interprets this pattern through the information environment around gender-diverse firms. Institutional investors appear to hold less in gender-diverse firms when institutional following is already high, which is consistent with richer disclosure and more informative stock prices reducing the value of private information advantages.
What this paper contributes.
Connects board diversity with institutional ownership.
The paper moves the governance discussion from board composition to how informed investors allocate capital.
Examines several institution types.
The negative association appears across banks, insurance-related institutions, and mutual funds.
Documents lower institutional holdings.
Gender-diverse firms tend to have lower institutional ownership, especially where institutional following is already high.
Points to information transparency.
The results are consistent with gender-diverse boards improving disclosure quality and reducing information asymmetry.