The Gender Position Gap and Firm Performance

44 Pages Posted: 4 Nov 2020 Last revised: 20 Mar 2021

See all articles by Chuchu Liang

Chuchu Liang

University of California, Irvine - Paul Merage School of Business

Ben Lourie

University of California, Irvine

Alexander Nekrasov

University of Illinois Chicago

Terry J. Shevlin

University of California-Irvine

Date Written: March 19, 2021

Abstract

In the workplace, women are less likely than men to hold higher paying positions. We refer to this phenomenon as the gender position gap. While the gender position gap is an important problem that affects millions of women and their families, its implications for firms are unclear. In this paper, we examine the gender position gap of firm employees and its association with future firm performance. We use novel gender and salary data on employees that hold various positions within firms. We find that the gender position gap is wider for firms with larger female–male differences in human capital characteristics (prior work experience and education), fewer female leaders, and weaker monitoring. Firms with a larger gender position gap have poorer future performance. This negative association is not driven by employees at the top or bottom end of the corporate hierarchy. The negative association is stronger for firms that rely more on human capital. Firms with a larger gender position gap also have lower future stock returns, which suggests that investors do not fully utilize information about gender position gaps. Overall, our findings are consistent with the view that gender position gaps contain information about future firm performance.

Keywords: gender position gap, female employees, gender diversity, gender equality, firm performance, stock returns

JEL Classification: M40, G10

Suggested Citation

Liang, Chuchu and Lourie, Ben and Nekrasov, Alexander and Shevlin, Terry J., The Gender Position Gap and Firm Performance (March 19, 2021). Available at SSRN: https://ssrn.com/abstract=3681040

Chuchu Liang

University of California, Irvine - Paul Merage School of Business ( email )

Irvine, CA California 92697
United States

Ben Lourie

University of California, Irvine ( email )

Irvine, CA 92697-3125
United States

Alexander Nekrasov (Contact Author)

University of Illinois Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

HOME PAGE: http://business.uic.edu/profiles/alexander-nekrasov/

Terry J. Shevlin

University of California-Irvine ( email )

Paul Merage School of Business
Irvine, CA California 92697-3125
United States
2065509891 (Phone)

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