The Influence of Female Director on the Probability of Companies Experiencing Financial Distress

Abstract

This study aims to determine the effect of Female Director on the Probability of a Company Experiencing Financial Distress. Springate model is used to predict the probability of a company experiencing financial distress. This study compares the effect of female director on the probability of a company experiencing financial distress without control variables and using control variables. The control variables in this study are board size, firm size and leverage. The population in this study were manufacturing companies listed on the Indonesia Stock Exchange in the period 2013-2018. The samples in this study were 27 companies. The results of this study indicate that female directors have no significant effect on the probability of a company experiencing financial distress. By using control variables, it is shown that female directors do not significantly influence the probability of a company experiencing financial distress with the control variables such as board size, firm size, and leverage.

Analysis of financial distress in banking companies listed on the indonesian stock exchange

“…The results of this study are the same as the research conducted by (Ariska et al, 2021); and (Koerniawan & Malelak, 2021). This study contradicts research conducted by (Liao et al, 2019); and which states that female director has a negative and significant effect on financial distress.…”

Does Board Gender Diversity Affect Financial Distress

“…But a different result is found in Ariska et al's (2021) research where there is no significant relationship between females on the board of directors and financial distress in Indonesian manufacturing firms. Koerniawan & Malelak (2021) does not find any significant relationship between female directors and financial distress in manufacturing firms in Indonesia. As there are many differences in previous research conducted, it is important to investigate more regarding female directors' relationship with financial distress to reduce the gap in the literature conducted.…”

Pengaruh Eksekutif Wanita, Struktur Modal, Dan Pertumbuhan Laba Terhadap Financial Distress

“…Selain eksekutif wanita, struktur modal juga mempengaruhi financial distress. Berdasar pada teori agensi, struktur modal ditentukan oleh biaya keagenan yang muncul karena adanya konflik kepentingan (Koerniawan dan Malelak, 2021). Mengendalikan penggunaan arus kas dan utang dapat mengurangi biaya keagenan yang muncul serta dapat menganalisis adanya risiko kebangkrutan karena tingginya utang industri.…”