Top executive gender, board gender diversity, and financing decisions: Evidence from debt structure choice

Sudip Datta, Trang Doan and Francesca Toscano

Journal of Banking & Finance, 2021, vol. 125, issue C

Abstract: Gender diversity in the C-suite and the boardroom have taken on greater importance in recent years. We establish a gender-based behavioral dimension to corporate debt maturity choice. Female executives choose a significantly shorter debt maturity structure compared to their male counterparts. However, their influence on debt maturity is inversely related to the proportion of their incentive compensation. Additionally, we find a substitution effect that moderates the relationship between executive gender and debt maturity structure as board gender diversity increases. Further, we find that firms led by females benefit from higher corporate credit ratings thus showing that the greater ethical sensitivities of female top executives compensate for the refinancing risk commonly associated with shorter-term debt. Transitions from male-to-female executive(s) result in shortening of debt maturity over the post-transition period. Our results survive a battery of robustness tests, including endogeneity, and contribute at the confluence of gender-based governance and corporate financial decision-making literatures.

Keywords: Debt maturity structure; Top executive gender; Gender-based financial decision-making (search for similar items in EconPapers)
JEL-codes: G32 G41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:125:y:2021:i:c:s0378426621000285

DOI: 10.1016/j.jbankfin.2021.106070

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