IDEAS home Printed from https://ideas.repec.org/a/col/000443/021235.html
   My bibliography  Save this article

Gender Balance to The Rescue: Examining The Relationship Between Gender Diversity and Financial Distress in Corporate Settings

Author

Listed:
  • Siagan, Valentine

    (Universitas Advent Indonesia)

Abstract

This study explores the correlation between gender diversity in corporate leadership and financial distress in the business sector. The research aims to understand the role of gender balance in corporate stability and resilience, hypothesizing a potential inverse relationship with financial distress. The methodology includes a purposive sampling of firms listed on the Indonesia Stock Market, utilizing logistic regression models and analysis. Results suggest that firms with a higher proportion of women in top leadership positions experience fewer instances of financial distress and demonstrate greater corporate stability. The findings point towards the efficacy of gender-balanced leadership teams in preventing financial turmoil, advancing our understanding of diversity's role in enhancing organizational sustainability.

Suggested Citation

  • Siagan, Valentine, 2024. "Gender Balance to The Rescue: Examining The Relationship Between Gender Diversity and Financial Distress in Corporate Settings," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 16(2), pages 355-374, July.
    • Handle: RePEc:col:000443:021235
    as

    Download full text from publisher

    File URL: https://revfinypolecon.ucatolica.edu.co/article/view/5360
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Renee B. Adams & Benjamin E. Hermalin & Michael S. Weisbach, 2010. "The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 58-107, March.
    2. Katia Furlotti & Tatiana Mazza & Veronica Tibiletti & Silvia Triani, 2019. "Women in top positions on boards of directors: Gender policies disclosed in Italian sustainability reporting," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(1), pages 57-70, January.
    3. Guanping Zhou, 2019. "Financial distress prevention in China: Does gender of board of directors matter?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(6), pages 1-8.
    4. Nurlan Orazalin & Mady Baydauletov, 2020. "Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1664-1676, July.
    5. Jing Jia, 2019. "Does risk management committee gender diversity matter? A financial distress perspective," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 34(8), pages 1050-1072, July.
    6. Mauro Romano & Alessandro Cirillo & Christian Favino & Antonio Netti, 2020. "ESG (Environmental, Social and Governance) Performance and Board Gender Diversity: The Moderating Role of CEO Duality," Sustainability, MDPI, vol. 12(21), pages 1-16, November.
    7. Bennouri, Moez & Chtioui, Tawhid & Nagati, Haithem & Nekhili, Mehdi, 2018. "Female board directorship and firm performance: What really matters?," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 267-291.
    8. Sanjukta Brahma & Chioma Nwafor & Agyenim Boateng, 2021. "Board gender diversity and firm performance: The UK evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5704-5719, October.
    9. Katie Meara & Francesco Pastore & Allan Webster, 2020. "The gender pay gap in the USA: a matching study," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 271-305, January.
    10. Igbekele Sunday Osinubi, 2020. "Effects of financial distress and financing constraints on trade credit provisions," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 28(4), pages 545-566, August.
    11. repec:hal:journl:hal-02312104 is not listed on IDEAS
    12. Katarina Valaskova & Tomas Kliestik & Dominika Gajdosikova, 2021. "Distinctive determinants of financial indebtedness: evidence from Slovak and Czech enterprises," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(3), pages 639-659, September.
    13. Perryman, Alexa A. & Fernando, Guy D. & Tripathy, Arindam, 2016. "Do gender differences persist? An examination of gender diversity on firm performance, risk, and executive compensation," Journal of Business Research, Elsevier, vol. 69(2), pages 579-586.
    14. Ahmad Abbas & Andi Ayu Frihatni, 2023. "Gender diversity and firm performances suffering from financial distress: evidence from Indonesia," Journal of Capital Markets Studies, Emerald Group Publishing Limited, vol. 7(1), pages 91-107, May.
    15. repec:eme:maj000:maj-05-2018-1874 is not listed on IDEAS
    16. Krista B. Lewellyn & Maureen I. Muller-Kahle, 2020. "The Corporate Board Glass Ceiling: The Role of Empowerment and Culture in Shaping Board Gender Diversity," Journal of Business Ethics, Springer, vol. 165(2), pages 329-346, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Beloskar, Ved Dilip & Haldar, Arunima & Gupta, Anupama, 2024. "Gender equality and women’s empowerment: A bibliometric review of the literature on SDG 5 through the management lens," Journal of Business Research, Elsevier, vol. 172(C).
    2. Usama Laique & Fahad Abdullah & Ijaz Ur Rehman & Bruno S. Sergi, 2023. "Two decades of research on board gender diversity and financial outcomes: Mapping heterogeneity and future research agenda," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2121-2144, September.
    3. María‐Florencia Amorelli & Isabel‐María García‐Sánchez, 2021. "Trends in the dynamic evolution of board gender diversity and corporate social responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 537-554, March.
    4. Simon Rafaqat & Sahil Rafaqat & Saoul Rafaqat & Dawood Rafaqat, 2022. "The Impact of Workforce Diversity on Organizational Performance: A Review," Journal of Economics and Behavioral Studies, AMH International, vol. 14(2), pages 39-50.
    5. Aruoriwo Marian Chijoke-Mgbame & Agyenim Boateng & Chijoke Oscar Mgbame, 2020. "Board gender diversity, audit committee and financial performance: evidence from Nigeria," Accounting Forum, Taylor & Francis Journals, vol. 44(3), pages 262-286, July.
    6. Cong-Duc Tran & Minh-Tuan Phung & Fu-Ju Yang & Yi-Hsien Wang, 2020. "The Role of Gender Diversity in Downside Risk: Empirical Evidence from Vietnamese Listed Firms," Mathematics, MDPI, vol. 8(6), pages 1-22, June.
    7. Maria Giuseppina Bruna & Rey Dang & Marie-José Scotto & Aymen Ammari, 2019. "Does board gender diversity affect firm risk-taking? Evidence from the French stock market," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 915-938, December.
    8. Mengyao Xia & Bangzhu Zhu & Helen Huifen Cai, 2023. "Does duration of team governance decrease corporate carbon emission intensity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1363-1388, May.
    9. Ammar Ali Gull & Ammar Abid & Rashid Latief & Muhammad Usman, 2021. "Women on board and auditors’ assessment of the risk of material misstatement," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 679-708, December.
    10. Pallab Kumar Biswas & Larelle Chapple & Helen Roberts & Kevin Stainback, 2023. "Board Gender Diversity and Women in Senior Management," Journal of Business Ethics, Springer, vol. 182(1), pages 177-198, January.
    11. Nerantzidis, Michail & Tzeremes, Panayiotis & Koutoupis, Andreas & Pourgias, Apostolos, 2022. "Exploring the black box: Board gender diversity and corporate social performance," Finance Research Letters, Elsevier, vol. 48(C).
    12. Hanen Khemakhem & Manel Maalej, 2024. "The gender gap: what about board members’ perspective?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(2), pages 483-506, June.
    13. Abubakr Saeed & Muhammad Saad Baloch & Hammad Riaz, 2022. "Global Insights on TMT Gender Diversity in Controversial Industries: A Legitimacy Perspective," Journal of Business Ethics, Springer, vol. 179(3), pages 711-731, September.
    14. Lucrezia Songini & Anna Pistoni & Patrizia Tettamanzi & Fabrizio Fratini & Valentina Minutiello, 2022. "Integrated reporting quality and BoD characteristics: an empirical analysis," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(2), pages 579-620, June.
    15. Elnahass, Marwa & Alharbi, Rana & Mohamed, Toka S. & McLaren, Josie, 2023. "The Nexus among board diversity and bank stability: Implications from gender, nationality and education," Emerging Markets Review, Elsevier, vol. 57(C).
    16. Felipe Arenas-Torres & Miguel Bustamante-Ubilla & Valentín Santander-Ramírez & Pedro Severino-González, 2022. "Diversity and Governance: Is There Really Progress?," Sustainability, MDPI, vol. 14(9), pages 1-14, April.
    17. Elnahass, Marwa & Alharbi, Rana & Mohamed, Toka S. & McLaren, Josie, 2024. "Women directors’ attributes and demographics: New insights into bank risk," Research in International Business and Finance, Elsevier, vol. 71(C).
    18. María José Ibáñez & Felipe Vásquez Lavin & Roberto D. Ponce Oliva, 2023. "Female Underperformance Hypothesis Revisited: Methodological Review and Empirical Testing," SAGE Open, , vol. 13(4), pages 21582440231, December.
    19. Yasser Eliwa & Ahmed Aboud & Ahmed Saleh, 2023. "Board gender diversity and ESG decoupling: Does religiosity matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4046-4067, November.
    20. Isabel‐María García‐Sánchez & Valentina Minutiello & Patrizia Tettamanzi, 2022. "Gender disclosure: The impact of peer behaviour and the firm's equality policies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(2), pages 385-405, March.

    More about this item

    Keywords

    Gender Diversity; Financial Distress; Firm Performance; Corporate Governance; Indonesia Stock Market;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000443:021235. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Universidad Católica de Colombia (email available below). General contact details of provider: https://edirc.repec.org/data/feuccco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.