Gender diversity and bank performance in developing countries: The moderating effect of culture

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Abstract

The purpose of this paper is to examine the relationship between women on the board of directors and bank performance under the moderating effect of national culture. The study is conducted on a sample of 134 listed commercial banks from 15 emerging countries belonging to the Middle East and North Africa (MENA) and Central Asia regions over a nine-year period (2012–2020). Results obtained show that the presence of women on the board is negatively and significantly correlated with financial performance. In an environment with high levels of individualism and of power distance, the presence of women on boards negatively impacts banks’ performance. Our results corroborate the findings of Bhatia et al. (2023) and Talavera et al. (2018). When examining the interaction between cultural dimensions and board gender diversity, we find that gender diversity generally has a positive effect on bank performance. However, this positive relationship weakens in countries with higher levels of masculinity. In highly masculine cultures, the net effect may even become negative, highlighting the moderating role of cultural context. The presence of women on the board continues to exert a negative effect on financial performance in Islamic banks. Our results are robust to the use of an alternative measure of gender diversity and to endogeneity tests.

Keywords: Gender Diversity, Islamic Banks, Governance, Culture, Financial Performance

Authors’ individual contributions: Conceptualization — H.S. and H.M.; Methodology — H.S.; Investigation — H.M.; Resources — O.B.; Writing — Original Draft — H.S.; Writing — Review & Editing — H.M. and O.B.

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

JEL Classification: G15, G21, G34, M14

Received: 17.04.2025
Revised: 27.06.2025; 20.08.2025
Accepted: 08.09.2025
Published online: 10.09.2025

How to cite this paper: Sbai, H., Meghouar, H., & Benaguid, O. (2025). Gender diversity and bank performance in developing countries: The moderating effect of culture. Corporate Board: Role, Duties and Composition, 21(3), 35–47. https://doi.org/10.22495/cbv21i3art3