The board gender composition and cost of debt: Empirical evidence from Jordan

Abstract

The present research aims to examine the influences of board gender composition on debt costs and its significance to Jordanian creditors: mainly banks, using agency and resource dependence theories. A sample of 113 non‐financial Jordanian firms listed on the Amman Stock Exchange (ASE) from 2010 to 2019 was utilised to explore the impact of board gender on the cost of debt financing through panel regression analysis. To tackle endogeneity concerns, we employ a two‐step system generalised method of moments estimator. The findings discovered that more female directors on firm boards generated economic benefits for non‐financial sectors, which achieved an average 0.75% cut‐off interest rate incurred by lenders compared to the counterparts with fewer female directors. Our findings are still robust to endogeneity concerns. The findings offered valuable insights for academics, shareholders, firms, and regulators. Shareholders are required to provide more pressure on firms to enhance gender equality. Firms should adjust board gender composition via the inclusion of more female directors while regulators should develop guidelines, such as a minimum female quota in promoting more females to the board. The finding generalisability is limited to developing markets with similar settings. This study bridged a vital gap in the governance literature on the nexus between board gender composition and debt costs in Jordanian contexts where no minimum gender quota exists.

Is audit committee busyness associated with earnings management? The moderating role of foreign ownership

“…Furthermore, to ensure that the data were free from multicollinearity, the variance inflation factor (VIF) test was conducted. As shown in Table 4, a maximum VIF of 1.77 and the least of 1.05 shows the absence of a multicollinearity problem in the model (Hair et al , 2010; Mansour et al , 2023).…”

Board gender diversity and bank performance in Jordan

“…To support the reliability of the current findings, this study references previous research conducted by Gharbi and Othman (2023). Additionally, an alternate measurement of BGD was utilized to strengthen the regression analysis (Mansour et al, 2023b), the ratio of female directorship on the bank's board (BGD %). Therefore, the more WOCBs there are, the more diverse it becomes.…”

“…and Chouaibi (2023) believe they are crucial for long-term growth, especially in countries like Jordan with limited financial market development(Mansour et al, 2023a). The objective of the study will be accomplished by including entirely listed banks on the Jordanian Exchange as the study sample, primarily due to their high level of regulation(Mansour et al, 2023b). By 2024, the Central Bank of Jordan (CBJ) mandated publicly listed banks to have 20% representation of WOCBs and 25% in CEO positions.…”

“…By 2024, the Central Bank of Jordan (CBJ) mandated publicly listed banks to have 20% representation of WOCBs and 25% in CEO positions. Jordan's Central Bank Chief, Dr. Ziyad Fariz, made it clear that gender diversity in banks is vital for future progress and profitability(Mansour et al, 2023b). The study covers the years 2010 through 2022, during which there were 182 bank-year observations.…”

Impact of Audit Committee Effectiveness on Accrual and Real Earnings Management among Jordanian Listed Firms: Conceptual Paper

“…Further research is needed to explore how the AC's independence, level of activity (number of meetings), and financial expertise can help prevent EM, especially in Jordan, which has recently reformed CG. Moreover, Jordan has a unique institutional environment (Mansour et al, 2024;Mansour, Al Amosh, et al, 2022) that draws the attention of researchers to provide new evidence about the quality of CG mechanisms.…”