Gender diversity and cost of equity capital: evidence from an emerging market

Luiz Eduardo Gaio and Nelson Oliveira Stefanelli

Journal of Economics, Finance and Administrative Science, 2025, vol. 30, issue 60, 337-363

Abstract: PurposeThis study examines the relationship between board gender diversity and the cost of equity among publicly traded Brazilian companies.Design/methodology/approachThe sample includes Brazilian firms listed on B3 from 2010 to 2023. This study estimated linear and nonlinear regression models using the two-step generalized method of moments (GMM). It measured gender diversity through board composition metrics and diversity indices, while it calculated the cost of equity using the Fama–French five-factor model.FindingsThe results obtained suggest that increased board gender diversity is associated with a lower cost of equity, with a nonlinear effect indicating that progressive diversity improvements yield more significant reductions in capital costs.Originality/valueThis study better provides a comprehension of gender diversity and financial performance in a Latin American emerging market, addressing a gap in research predominantly focused on developed economies. It is the first to use the Fama–French five-factor model to explore this relationship in emerging markets.

Keywords: Gender diversity; Cost of equity; Financial performance; Fama–French five-factor; Emerging market (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jefasp:jefas-02-2024-0059

DOI: 10.1108/JEFAS-02-2024-0059

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