The Impact of Board Gender Diversity on Firm Capital Structure: A Quantitative Study on S&P 500 firms
(2023) BUSN79 20231Department of Business Administration
- Abstract
- Purpose: The objective of this study is to determine whether or not board gender diversity influences the capital structures of S&P 500 firms. This is done based on the premise of female risk aversion and conventional capital structure and agency issues theories. With this foundation, we intend to close the knowledge gap regarding the effects of gender diversity on corporate boards.
Methodology: In this study, a panel dataset is analysed using ordinary least squares (OLS) regressions. OLS regressions include both pooled OLS and fixed effects. In addition, robust standard errors clustered by firm id are employed to address heteroskedasticity issues. The DTC dependent variable and the main explanatory variable board gender diversity are... (More) - Purpose: The objective of this study is to determine whether or not board gender diversity influences the capital structures of S&P 500 firms. This is done based on the premise of female risk aversion and conventional capital structure and agency issues theories. With this foundation, we intend to close the knowledge gap regarding the effects of gender diversity on corporate boards.
Methodology: In this study, a panel dataset is analysed using ordinary least squares (OLS) regressions. OLS regressions include both pooled OLS and fixed effects. In addition, robust standard errors clustered by firm id are employed to address heteroskedasticity issues. The DTC dependent variable and the main explanatory variable board gender diversity are finally subjected to a robustness test.
Theoretical Perspectives: This investigation is grounded in conventional theories of capital structure, such as trade-off theory and pecking order theory. In addition, it includes a conventional theory, namely agency theory, as well as a relatively contemporary theory known as critical mass. These theoretical channels have been discussed previously in either capital structure or gender diversity research. To establish the relationship between board gender diversity and capital structure and these theories, we include the following.
Empirical Foundation: The data sample is 354 firms listed on S&P 50 from 2015-2022.
Conclusions: This paper's findings support the notion that board gender diversity is negatively related to the debt in a firm's capital structure, which is consistent with both previous empirical findings on this topic and psychological literature describing the risk-averse behaviour of women. In addition, the results support the critical mass literature, as we find strong evidence that there must be a threshold of women on the board for them to have a significant impact on corporate decision-making. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9117860
- author
- Mittag-Leffler, Daniel Erik LU and Sehgal, Kabir LU
- supervisor
-
- Marco Bianco LU
- organization
- course
- BUSN79 20231
- year
- 2023
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- board gender diversity, capital structure, critical mass, female risk aversion, leverage, debt-to-capital, trade-off theory, pecking order theory, agency theory.
- language
- English
- id
- 9117860
- date added to LUP
- 2023-09-12 16:16:57
- date last changed
- 2023-09-12 16:16:57
@misc{9117860,
abstract = {{Purpose: The objective of this study is to determine whether or not board gender diversity influences the capital structures of S&P 500 firms. This is done based on the premise of female risk aversion and conventional capital structure and agency issues theories. With this foundation, we intend to close the knowledge gap regarding the effects of gender diversity on corporate boards.
Methodology: In this study, a panel dataset is analysed using ordinary least squares (OLS) regressions. OLS regressions include both pooled OLS and fixed effects. In addition, robust standard errors clustered by firm id are employed to address heteroskedasticity issues. The DTC dependent variable and the main explanatory variable board gender diversity are finally subjected to a robustness test.
Theoretical Perspectives: This investigation is grounded in conventional theories of capital structure, such as trade-off theory and pecking order theory. In addition, it includes a conventional theory, namely agency theory, as well as a relatively contemporary theory known as critical mass. These theoretical channels have been discussed previously in either capital structure or gender diversity research. To establish the relationship between board gender diversity and capital structure and these theories, we include the following.
Empirical Foundation: The data sample is 354 firms listed on S&P 50 from 2015-2022.
Conclusions: This paper's findings support the notion that board gender diversity is negatively related to the debt in a firm's capital structure, which is consistent with both previous empirical findings on this topic and psychological literature describing the risk-averse behaviour of women. In addition, the results support the critical mass literature, as we find strong evidence that there must be a threshold of women on the board for them to have a significant impact on corporate decision-making.}},
author = {{Mittag-Leffler, Daniel Erik and Sehgal, Kabir}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Impact of Board Gender Diversity on Firm Capital Structure: A Quantitative Study on S&P 500 firms}},
year = {{2023}},
}