Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303740 
Year of Publication: 
2022
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 10 [Issue:] 1 [Article No.:] 2109274 [Year:] 2022 [Pages:] 1-34
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
We examine the role of female directors on firm cost of equity in the context of US-listed firms, and further explore the mediating impact of debt financing policy on such association. Using a dataset of 4619 non-financial firm-year observations covering the period of 2008-2019, we find that firms with female directors on boards are likely to exhibit a lower cost of equity, through relying on a less risky financing decision. The indirect effect is found to take up around 45% of the female-cost of equity association. In addition, our analysis also indicates that the lower debt financing levels are realised only if female representation reaches a critical mass of around 28%. Our findings provide important implications for firms in balancing the gender ratio within their boards to level out their risk-taking through their financing decisions.
Subjects: 
board gender diversity
capital structure
cost of equity
mediating effect
JEL: 
C23
G01
G21
G28
L50
M41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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