Board gender diversity and US corporate bonds

PurposeThe purpose of this paper is to examine the impact of board gender diversity on bond terms and bondholders’ returns.Design/methodology/approachThe authors perform pooled OLS regression, simultaneous regressions and propensity score matching to a panel data set of bond data for 319 US firms fr...

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Bibliographic Details
Published in:International journal of managerial finance 2019-10, Vol.15 (5), p.771-791
Main Authors: Oyotode-Adebile, Renee M, Zubair Ali Raja
Format: Article
Language:English
Subjects:
Abnormal returns
Boards of directors
Bond ratings
Corporate bonds
Corporate governance
Default
Disclosure
Gender
Hypotheses
Ratings & rankings
Stockholders
Workplace diversity
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Summary:PurposeThe purpose of this paper is to examine the impact of board gender diversity on bond terms and bondholders’ returns.Design/methodology/approachThe authors perform pooled OLS regression, simultaneous regressions and propensity score matching to a panel data set of bond data for 319 US firms from 2007 to 2014.FindingsThe authors find that firms with gender-diverse boards have lower yields, higher ratings, larger issue size and shorter maturity. They also find that bondholders require fewer returns from firms with gender-diverse boards. However, the effect is more pronounced when women, constitutes at least 29.67 percent of the board.Originality/valueThis analysis supplements the findings that board gender diversity is essential for bondholders. It shows that bondholders should look at board gender diversity as a criterion to invest because bonds issued by firms with gender-diverse board have less risk. For practitioners, this study shows that more women participation on boards leads to a reduction in borrowing costs.
ISSN:1743-9132
1758-6569
DOI:10.1108/IJMF-10-2018-0290