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

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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.

Keywords: Director, Female Board Representation, Capital Structure, Gender Diversity

Authors’ individual contribution: Conceptualization — B.Y. and M.Z.; Methodology — C.-W.C. and B.Y.; Validation — Q.Z.; Formal Analysis — C.-W.C.; Data Curation — C.-W.C.; Writing — Original Draft — B.Y.; Writing — Review & Editing — C.-W.C., B.Y., M.Z., and Q.Z.; Project Administration — B.Y.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, G32, G34

Received: 28.01.2022
Accepted: 03.05.2022
Published online: 06.05.2022

How to cite this paper: Chen, C.-W., Yi, B., Zhao, M., & Zheng, Q. (2022). Even one can make a difference — Female board representation and capital structure: Evidence from Taiwan. Corporate Ownership & Control, 19(3), 112–122. https://doi.org/10.22495/cocv19i3art8