Does religiosity have a dark side? Evidence from board gender diversity

Abstract

PurposeThis research aims to investigate whether local religious norms influence corporate attitudes toward board gender diversity.Design/methodology/approachThe data are collected from American Religion Data Archive (ARDA) website and Boardex. The analysis used in this paper is ordinary least squares (OLS) regression and two-stage least squares (2SLS) models.FindingsThe authors find that firms headquartered in religious areas are negatively associated with corporate board gender diversity initiatives, proxied by the change in the total number of female directors, the share of directors that are newly hired females and the percentage of female directors on the board. The results remain robust when the authors employ alternative econometric specifications, including propensity score matching (PSM) and instrumental variable (IV) analysis. Furthermore, through quasi-experiments, the authors find that two exogenous shocks, the Vatican Leaks scandal and the Big Three board gender diversity campaign, attenuate the negative association between religiosity and diversity.Research limitations/implicationsThis study unveils an important but previously unidentified factor that restrains firms from exercising one of their socially responsible activities – board gender diversity and provides new insight into the emerging literature on the influence of local culture on corporate behaviors.Originality/valueThe lack of existing literature on factors that contribute to corporate board gender diversity presents opportunities for further study.