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.

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This study examines the effect of changes in special items on future firm growth. We find that a decrease in special items reverses almost completely through one-year-ahead earnings, whereas an increase in special items is positively associated with the next year’s earnings growth. We also find that the information embedded in changes in special items is incremental to that of fundamental signals documented in the literature, thereby identifying changes in special items as an additional fundamental signal. Furthermore, we find that both an increase and a decrease in special items lead to decreases in future sales and net operating assets, suggesting an inverse U-shaped relation between changes in special items and growth in these measures. Overall, our findings underscore the importance of considering various growth measures in understanding the implication of changes in special items for future firm growth.

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