Effect of Companies Senior Personnel Gender Differences on Company Capital Structure

Abstract

Previous researches have analyzed the effect of gender diversity toward financial performance toward the companies. This article aims to analyze the effect of gender situation toward capital structure on the whole A shares companies. The data mainly contain gender ratio of senior executives, gender of board of directors, firm size, industries classification, number of people on board, and of total remuneration of the top three directors. The previous two variables are the core explaining variable. The period is from 2010 to 2019 and the frequency is yearly. The OLS pooled regression and fixed effect model are chosen to analyzed. The results are not totally consistent with previous research suggesting the increase of female on the board, that is, increase gender diversity would definitely improve capital structure. The female board of directors will indeed make less debt financing compared with male board of directors. However, the female ratio in the senior executives is usually positively related with the D/E ratio. The possible reason is the overall conservative attitude of female can help them avoid overconfidence bias when using debt financing, and thus loan less debt and make the D/E be lower. However, on the other hands, it also makes female be too afraid of the lack of cash flow and may make more loan. Other parts of the results focusing on the control variable are consistent with previous researches and can be explained by classical financial theory.