Men are from Mars, Women are from Venus: Gender and Mergers and Acquisitions

This paper examines the association between female director representation on corporate boards and mergers and acquisitions (M&As). Using acquisition bids initiated by the S&P 1500 firms during 1997-2009, we find that each ten-percent representation of female directors on a corporate board is associated with a reduction in the number of a company’s acquisition bids by 4.7 percent: women are less acquisitive than men. Furthermore, using over 450 acquisition bids for which we have data on bidder and target firm characteristics and their board membership, we find that each ten-percent of female directors on the bidder board is associated with a reduction in the bid premium by 13.3 percent. We argue that these results are what we would expect if, as other researchers have shown, women are less overconfident than men.