Even one can make a difference — Female board representation and capital structure: Evidence from Taiwan

Abstract

This paper investigates whether and how female board representation will affect firms’ capital structure using a sample of 16,477 firm-year observations during the period from 2006 to 2017 obtained from Taiwan Economic Journal (TEJ). While 67% of Taiwanese firms have female directors, most firms have only one female director. We find that firms with female directors use more debt financing, particularly, more short-term debt. Our results support the notion that female board representation is associated with increased monitoring through increased use of debt, particularly short-term debt. Our results remain consistent with various robustness tests using alternative samples, measures, and methodologies.