Does board gender diversity affect capital structure decisions?

Abstract

PurposeThe purpose of this paper is to investigate the indirect relationship between board gender diversity and capital structure decisions and to examine whether the capital structure is affected by the type of approach used to promote women’s participation in the boardroom.Design/methodology/approachBased on a sample of French non-financial listed companies over the period 2006–2019, this paper uses structural equations modeling, difference-in-differences using propensity score matching and chow test to highlight these effects.FindingsThis paper finds that the relationship between the board gender diversity and the capital structure is mediated through the information transparency channel and firm risk taking channel. Furthermore, the results show that the effect of board gender diversity on capital structure decisions varies through the approach adopted (voluntary, enabling or coercive).Originality/valueThis paper contributes to the literature in several ways. First, the study is to the knowledge the first to examine whether and how board gender diversity affects capital structure decisions through two mediations channels, namely, the information transparency and the firm risk taking. Second, the study is one of the first to examine whether the capital structure is affected by the type of approach used to promote women’s participation in the boardroom: coercive, enabling or voluntary approach.