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Do women have a say? A moderated mediation model's influence on the leverage policy toward corporate sustainable growth

Author

Listed:
  • Rohmini Indah Lestari
  • Indarto Indarto
  • Yuli Budiati

Abstract

Purpose - Examining the role of women on board (WoB) toward corporate sustainable growth (CSG) through leverage policy (LP). This research also investigates the interaction effect of WoB and LP on improving CSG. Design/methodology/approach - This study uses a moderated mediation model to examine the impact of WoB on CSG, mediated by LP. Data from 48 KEHATI IDX ESG Sector Leaders Index companies observed from 2015 to 2021 were analyzed using the structural equation model partial least square (SEM-PLS) Warp.PLS 8.0. The research applies instrumental variables (IV) to test and control endogeneity due to nonrandom sample selection. Findings - We found evidence that LP acts as a full mediator between the presence of WoB and CSG. The presence of WoB plays a moderate role by slightly weakening the influence of LP on CSG. Furthermore, we obtained evidence showing that the relationship between WoB and CSG is J-curve-shaped, a nonlinear relationship related to critical mass. Where the WoB ratio is at least 8.35% or higher, it will increase CSG in companies that have implemented the concept of environment social governance (ESG) in Indonesia. Originality/value - This model uses a moderated mediation model and J-curve analysis; there is an interaction between WoB and LP on different paths of the mediator to CSG. This model examines the role of WoB as a moderator of the effect of LP on CSG. A nonlinear J-curve test was conducted to determine the minimum level of WoB that can influence the increase of CSG.

Suggested Citation

  • Rohmini Indah Lestari & Indarto Indarto & Yuli Budiati, 2024. "Do women have a say? A moderated mediation model's influence on the leverage policy toward corporate sustainable growth," Journal of Asian Business and Economic Studies, Emerald Group Publishing Limited, vol. 31(3), pages 233-245, May.
    • Handle: RePEc:eme:jabesp:jabes-02-2023-0049
    DOI: 10.1108/JABES-02-2023-0049
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    More about this item

    Keywords

    Corporate sustainable growth; Good corporate governance; Leverage; Return on equity; Women on board; G32; J16; Q01;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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