Board gender diversity and the financial performance of Pakistani non‐financial firms: A fuzzy‐set QCA approach

Abstract

According to the upper echelon's theory, the decision-making process in regard to competitive strategies by the top management has an enduring impact on firm performance (Hambrick & Mason, 1984). Moreover, the attributes of the individuals in top management may also affect the decision-making process. The purpose of this research is to analyze the board gender diversity impact on the financial performance of the non-financial companies of Pakistan. Qualitative comparative analysis (QCA) is employed which is premised on Boolean algebra that sets foundation for the theoretical framework of complexity theory. The sample comprises of 74 non-financial firms listed on the KSE-100 Index. The results are modelled as a component of the intermediate solutions with board-level variables and gender diversity for the outcome variable (i.e., EVA and Tobin's Q). From board level variables, the impact of gender diversity and foreign directors is identified among most of the combinations whereas leverage is the prominent variable within the firm level variables, the boards of which tend to be small. The results showed a heterogeneous nature of response as board gender diversity exhibited stronger association in some configurations and in some cases it exhibited weaker association similar to that of (Pandey et al., 2022).Originality: This study is an attempt to explore the of board gender diversity role in a firm's performance using board level and firm level variables. Therefore, this work adds to the prior research by adding a complementarity-based methodology for analyzing board gender diversity.

Board Gender Diversity and Cost of Debt: Evidence from MENA Region: Conceptual Paper

“…As a result, there has been a rise in the number of studies examining the influence of women directors on various important factors. These include capital structure and financial distress García & Herrero (2021); Mansour et al (2022a); Mansour et al (2022b); Shubita (2023a), agency costs (Ain et al (2021), financial manipulation (Wahid, 2019), dividend payments Benjamin & Biswas (2019), firm efficiency , corporate social performance Jizi et al (2022); Lutfi et al (2023) and firm performance (Naz et al, 2023;Salloum et al, 2019). According to Pandey et al (2020), these results are also expected to apply to creditors and lenders in the corporate sector.…”

“…However, it has been found that having women directors is a crucial determinant of effective governance in companies Alshirah et al (2023); Jizi et al (2022), particularly when it comes to their financing strategies (Naz et al, 2023). This is especially evident in decisions related to capital structure and borrowing costs Mansour et al (2023b); Miah et al (2023); Aksoy & Yilmaz (2023), as the presence of gender diversity can lead to robust plans that contribute to the long-term survival of companies in the market (Zattoni et al, 2022).…”

Board gender diversity and bank performance in Jordan

“…Still, studies on this matter have yielded conflicting results (Khan et al, 2023). Unlike industrialized nations like Norway, Spain, Italy, and Germany to name a few (Yu & Madison, 2021), where there are gender quotas in place, most developing countries (Unite et al, 2019) with fragile investor protection, like Jordan (Almarayeh, 2021), do not have rules or regulations requiring or encouraging WOCBs (Naz et al, 2023). So, there is a limited probe into the link between BGD and company performance in developing nations (Hazaea et al, 2023), which could be attributed to the scarcity of WOCBs (Mohsni et al, 2021).…”