Board gender-balancing and insider trading performance

B. Espen Eckbo and Bernt Arne Ødegaard

Using holdings-based performance measures, we test whether Norway's doubling of its female director network (through board gender-balancing) has increased female insider trading performance. We find that the gender-based insider performance has remained statistically indistinguishable from zero. However, consistent with a positive network information effect, the immediate market reaction to non-routine purchases by primary female insiders (executives and directors) has become positive and significant and of a magnitude equal to that of male insiders. Also, increased gender-based insider-trading propensities during the financial crisis suggest that female directors are no more risk averse than males.

JEL classification: G14; M14

Keywords Board gender-balancing, director network, insider holdings, trading performance, risk aversion