We investigate whether female board representation affects investment efficiency at Korean publicly traded companies from 2006 to 2014. We find a positive association between female directorship and investment efficiency. For a subsample of firms that are classified into over-and under-investment groups, we find that the subsample of firms with female directors is less likely to over-invest compared to the group without female directors. This implies that female directors' risk-aversion, conservatism, and prudence affect investment efficiency by reducing over-investment rather than reducing under-investment. Other robustness tests corroborate our conclusion that female directors help to improve investment efficiency.

No abstract

This paper examines whether firms that engage in corporate social responsibility activities (CSR firms) manage reported cash flows from operations (CFO) when they have strong credit market incentives. We find that CSR firms near financial distress and those having a long‐term credit rating near the investment/non‐investment grade cutoff are more likely to inflate reported CFO, compared to all other firms. We also find evidence that CSR firms with these credit market incentives appear to resort mainly to classification rather than timing as a tool for managing CFO. Further, we find that the degree of CFO management performed by those CSR firms is more pronounced under weaker corporate governance. Overall, our findings suggest that CSR firms with stronger credit market incentives are more likely to manage CFO, and that such CFO management behavior is likely to be implemented at the expense of shareholders’ interest.

No abstract