Abstract
AbstractWe investigate board and management gender diversity issues in the microfinance setting with data (2010–2014) drawn from 494 microfinance institutions across 76 countries. We find that board gender diversity positively predicts management gender diversity. On the effects of board and management gender diversity on the financial performance of microfinance institutions (MFIs), we find that whereas board gender diversity is negatively and significantly related to MFI financial performance, management gender diversity is negatively but insignificantly related to MFI financial performance. We show that 50% or higher diversity in either board or management is the threshold at which gender diversity is productive to MFIs. However, danger exists that an MFI that combines 50% or higher female representation on its board with 50% or higher female representation on its management team is likely to experience a tumble in its financial performance. The overall effect of these outcomes is that the push for mor...
Highlights
Samuel Yaw Akomea is a senior lecturer in Marketing and International Business at the Department of Marketing and Corporate Strategy, KNUST School of Business of the Kwame Nkrumah University of Science and Technology, Kumasi
We follow the contingency approach to the analysis of the association between demographic diversity and firm performance by exploring whether management gender diversity moderate the relationship between board gender diversity and the financial performance of microfinance institutions (MFIs)
The effects of board and management gender diversity on MFI financial performance What are the effects of board and management gender diversity on MFI financial performance? We address this question by estimating Equation (2)
Summary
Panel RE aOne-year lag selection is based on Schwarz Information Criterion. **Represent 5% significance levels. ***Represent 1% significance levels. The positive and statistically significant coefficients of FBM ≥ 50 and FM ≥ 50 suggest that threshold effects exist in the relationships between board and management gender diversity and financial performance of MFIs. It means MFIs are more likely to benefit from gender diversity at board and management levels only when 50% or more females are on their boards as well as their management teams. Having failed to establish any significant relationship between our interaction term and any of the two financial performance measures, we proceed to explore whether the moderating effect of management gender diversity on board gender diversity could occur at threshold level.
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