Graduation Year

Spring 2012

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics-Accounting

Reader 1

Lisa K. Meulbroek

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© 2012 Alexandra M. Abramovitz

Abstract

This paper examines the relationship between female participation in top management and firm performance and capital structure. Additionally, we assess whether this relationship differs at Female Friendly versus Non-Female Friendly firms. Today, women account for nearly half of the total labor force, but constitute less than one tenth of Fortune 500 Top Earners. This warrants further exploration, and thus, we hope to understand the impact gender has on firm value. After controlling for industry, size, age, leverage, and other firm specific measures, we find that female participation in top management is associated with a higher interest coverage ratio. We then investigate the difference between firm classifications and find that Female Friendly firms tend to outperform their Non-Female Friendly counterparts on the basis of operating profit margin and tend to carry a more levered capital structure. This exploration offers foundational evidence to fuel a new direction for this conversation—enacting corporate policies that better accommodate the female talent pool may allow firms to access a source of competitive advantage.

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