Does board gender diversity affect financial performance? Evidence from Palestinian listed firms

Sana’ Atari, Ruaa BinSaddig, Bahaa Subhi Awwad and Naser Abdelkarim

Journal of Business and Socio-economic Development, 2026, vol. 6, issue 5, 510-524

Abstract: PurposeThis paper aims to examine the effect of board gender diversity and other board of directors' characteristics on financial performance in a developing economy.Design/methodology/approachThe paper uses panel data from 41 firms listed in Palestine during 2017–2023. Panel regression analysis was conducted using a random effects model, justified by the Hausman test. Board gender diversity was measured by the percentage of women on the board, a critical mass dummy and the Blau diversity index. The study also used board size and board meeting frequency as independent variables. Firm size, firm age, corporate leverage, industry, COVID-19 and the 2023 Israeli war in the Gaza Strip were used as control variables. The dependent variable was financial performance, measured by market-to-book value (MBV).FindingsThe results revealed a direct relationship between board gender diversity and firm valuation, only when measured using the Blau diversity index. Conversely, board size and board meeting frequency had an insignificant effect on market-to-book value.Research limitations/implicationsThis study contributes to the existing literature on corporate governance by offering novel evidence from an emerging market.Practical implicationsThe main implication of this study is that the existence of females having views in leadership could increase strategies and market outreach, eventually increasing firm’s market value.Social implicationsThe main implication of this study is that there is a necessity to increase the presence of women on the boards of listed firms in Palestine. The results of this study support the stakeholder and resource dependence theories, which argue that increasing diverse leadership can improve firm value.Originality/valueThis study contributes to the existing literature regarding corporate governance by offering novel evidence from an emerging market. It also provides practical implications for decision-makers, boards of directors and policymakers to improve corporate governance in developing countries.

Keywords: Board gender diversity; Corporate governance; Financial performance; Market-to-book value; Emerging markets (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jbsedp:jbsed-02-2026-0103

DOI: 10.1108/JBSED-02-2026-0103

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