Board gender diversity and sustainable growth rate: Chinese evidence

Figures & data

Table 1. List of variables and definition.

Notation	Measure
Sustainable growth rate (SGR)
SGR	SGR can be presented with the following formula: SGR = Profit margin × Asset turnover ratio × Leverage factor × Retention ratio.
SusGR1	SusGR1 can be presented with the following formula: SusGR1 = (Profit margin × Asset turnover ratio × Leverage factor × Retention ratio)/(1 – Profit margin × Asset turnover ratio × Leverage factor × Retention ratio).
Gender diversity
WDD	If the board has at least one female director, the variable is equal to 1; otherwise, it is 0.
WDP	The proportion of female directors on the board.
BLAU	Denoted as 1 – ${\sum }_{i=1}^n{P}_i^2,$ where Pi is the percentage of each category and n = 2 [female (male)].
SHANNON	Denoted as – ${\sum }_{i=1}^n{P}_i{\ln P}_i,$ where Pi is the percentage of each category and n = 2 [female (male)].
WDD1	If the board has one female director, the variable is equal to 1; otherwise, it is 0.
WDD2	If the board has two female directors, the variable is equal to 1; otherwise, it is 0.
WDD3	If the board has three or more female directors, the variable is equal to 1; otherwise, it is 0.
WID	The percentage of independent female directors on the board divided by board size.
WED	The percentage of female executive directors on the board divided by board size.
Corporate governance
BINDP	The no. of independent directors divided by the size of the board.
BSI	The total number of directors on the company’s board of directors.
BMEET	The number of board meetings held in a year.
CEOD	If the CEO is also the chairman of the board, the dummy variable is equal to 1, otherwise equal to 0.
CEOT	Number of years as CEO.
Firm characteristics
LEV	Divide the sum of short-term and long-term debt by total assets.
FSI	Natural log of the firm’s total assets.
LSALE	Log of the firm’s sales.
ASSG	Change in the firm’s total assets.

Table 2. Descriptive statistics.

	Mean	SD	p25	Median	p75
SGR	0.061	0.072	0.021	0.051	0.091
SusGR1	0.029	0.471	0.035	0.052	0.081
WDD	0.67	0.47	0.00	1.00	1.00
WDP (%)	12.80	12.21	0.00	11.10	22.22
BLAU	0.19	0.16	0	0.19	0.35
SHANNON	0.31	0.24	0	0.35	0.53
WID	0.056	0.08	0	0	0.11
WED	0.079	0.11	0	0.06	0.13
WDD1	0.37	0.48	0	0	1
WDD2	0.20	0.40	0	0	0
WDD3	0.08	0.27	0	0	0
BSI	8.87	1.95	8.00	9.00	9.00
BINDP	0.37	0.06	0.33	0.33	4.00
BMEET	9.27	4.01	7.00	9.00	11.00
CEOD	0.24	0.43	0.00	0.00	0.00
CEOT	2.91	2.83	0.92	2.00	3.83
LEV	0.54	5.44	0.28	0.45	0.61
FSI	21.78	1.29	20.91	21.64	22.51
LSAL	21.11	1.56	20.13	20.99	21.98
ASSG	0.21	0.46	0.02	.011	0.24

Note: All variables are as defined in Table 1.

Source: Authors’ calculation.

Table 3. Correlation matrix.

Variable	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)	(14)	(15)	(16)	(17)	(18)	VIF
(1) SGR	1.000
(2) SusGR1	0.827	1.000
(3) WDD	0.011	0.006	1.000																1.04
(4) WDP	0.026	0.027	0.732	1.000															1.07
(5) BLAU	0.023	0.023	0.067	0.449	1.000														1.03
(6) SHANNON	0.022	0.020	0.036	0.507	0.092	1.000													1.06
(7) WDD1	–0.003	–0.008	–0.060	0.526	0.067	0.175	1.000												1.0
(8) WDD2	0.015	0.008	0.425	0.346	0.497	0.485	–0.377	1.000											1.01
(9) WDD3	0.020	0.028	0.503	0.201	0.451	0.401	–0.219	–0.144	1.000										1.02
(10) BSI	0.021	0.009	–0.110	0.046	–0.084	–0.060	–0.018	0.037	0.048	1.000									1.00
(11) BINDP	0.043	0.036	0.045	–0.024	0.031	0.021	0.027	–0.019	–0.032	–0.407	1.000								1.42
(12) BMEET	0.033	0.008	0.042	0.037	0.042	0.042	0.020	0.018	0.008	–0.041	0.079	1.000							1.24
(13) CEOD	0.053	0.034	0.109	0.065	0.106	0.100	0.005	0.038	0.037	–0.168	0.109	0.011	1.000						1.18
(14) CEOT	0.144	0.155	0.081	0.051	0.075	0.072	–0.002	0.020	0.050	–0.052	0.070	0.035	0.129	1.000					1.09
(15) LEV	–0.044	–0.167	0.001	–0.006	–0.001	–0.002	–0.009	–0.008	0.018	–0.003	0.001	0.002	0.005	–0.013	1.000				1.32
(16) FSI	0.363	0.306	–0.097	–0.060	–0.098	–0.093	–0.004	–0.024	–0.043	0.224	0.059	0.263	–0.132	0.154	–0.019	1.000			2.69
(17) LSAL	0.383	0.337	–0.100	–0.062	–0.101	–0.095	–0.004	–0.025	–0.041	0.215	0.036	0.174	–0.124	0.117	–0.035	0.864	1.000		1.99
(18) ASSG	0.110	0.058	0.021	0.014	0.021	0.021	0.003	0.010	0.010	–0.025	0.018	0.157	0.044	–0.033	–0.009	0.129	0.072	1.000	1.06

Note: This table shows the correlation between the dependent, independent, and control variables. All variables are as defined in Table 1.

Source: Authors’ calculation.

Table 4. Augmented Dickey–Fuller (ADF) unit root.

	Level		1st difference
Variable	Coefficient	PV	Coefficient	PV
SGR	39.5202	0.000	196.5915	0.000
SusGR1	79.5323	0.000	223.4885	0.000
WDD	64.2211	0.000	165.3642	0.000
WDP	69.6063	0.000	176.8434	0.000
BLAU	72.6695	0.000	177.8437	0.000
SHANNON	74.9383	0.000	179.4625	0.000
WDD1	86.9496	0.000	187.144	0.000
WDD2	73.4051	0.000	156.5312	0.000
WDD3	52.9353	0.000	109.3625	0.000
BSI	52.898	0.000	257.8947	0.000
BINDP	61.7966	0.000	264.6477	0.000
BMEET	103.1921	0.000	372.3772	0.000
CEOD	60.276	0.000	125.4821	0.000
CEOT	45.9833	0.000	262.0955	0.000
LEV	95.3943	0.000	203.4826	0.000
FSI	51.6355	0.000	175.1871	0.000
LSAL	70.3647	0.000	171.4609	0.000
ASSG	179.1543	0.000	260.2935	0.000

Source: Authors’ calculation.

Table 5. Relationship between BGD and the firm’s SGR.

	OLS regressions
	SGR		SusGR1
Variable	(1)	(2)	(3)	(4)
WDD	0.058***		0.014***
	(3.538)		(2.851)
WDP		0.274***		0.076***
		(4.289)		(4.077)
BSI	–0.025***	–0.023**	–0.008*	–0.007**
	(–3.031)	(–2.518)	(–1.442)	(–2.099)
BINDP	0.103***	0.101***	0.436***	0.436***
	(7.135)	(7.117)	(9.674)	(9.670)
BMEET	–0.031***	–0.031***	–0.007***	–0.007***
	(–15.576)	(–15.580)	(–12.385)	(–12.409)
CEOD	0.095***	0.093***	0.006	0.005
	(5.035)	(4.936)	(1.061)	(0.951)
CEOT	0.017***	0.017***	0.006***	0.006***
	(5.696)	(5.666)	(7.373)	(7.342)
LEV	–0.006***	–0.006***	–0.696***	–0.696***
	(–4.359)	(–4.389)	(–55.467)	(–55.424)
FSI	0.156***	0.157***	0.030***	0.030***
	(11.145)	(11.185)	(7.114)	(7.140)
LSAL	0.253***	0.253***	0.112***	0.112***
	(23.493)	(23.516)	(33.711)	(33.775)
ASSG	0.197***	0.197***	0.021***	0.021***
	(11.520)	(11.491)	(4.239)	(4.204)
Industry effects	Yes	Yes	Yes	Yes
Year effects	Yes	Yes	Yes	Yes
n	25,164	25,164	24,984	24,984
R^2	0.258	0.258	0.299	0.300

Note: All variables are as described in Table 1. t-statistics are provided in parentheses.

*, **, *** indicate the level of significance at 10%, 5%, and 1%, respectively.

Source: Authors’ calculation.

Table 6. Sub-samples of state-controlled firms and legal-person-controlled firms.

	OLS regressions
	SGR		SusGR1
Variable	(1)	(2)	(3)	(4)
Panel A: State-controlled firms
WDD	–0.046*		–0.011
	(1.904)		(–1.567)
WDP		–0.084		–0.017
		(–0.760)		(–0.539)
Controls, year, and industry effects	✓	✓	✓	✓
n R^2	11,486 0.301	11,486 0.301	11,424 0.309	11,424 0.309
Panel B: Legal-person-controlled firms
WDD	0.114***		0.027***
	(5.262)		(4.186)
WDP		0.305***		0.092***
		(4.020)		(4.077)
Controls, year, and industry effects	✓	✓	✓	✓
n R^2	13,414 0.271	13,414 0.270	13,414 0.309	13,414 0.309

Note: All variables are as described in Table 1. t-statistics are provided in parentheses.

*, **, *** indicate the level of significance at 10%, 5%, and 1%, respectively.

Source: Authors’ calculation.

Table 7. Additional tests.

Variable	SGR	SusGR1
Panel A: Non-executive vs. executive women directors
WID	0.185***	0.084***
	(4.979)	(3.459)
WED	0.163**	0.041*
	(2.320)	(1.826)
Controls, year and industry effects	✓	✓
N	25,164	25,164
R^2	0.373	0.297
Panel B: Token vs. critical mass participation of women directors
FemD1	0.041**	0.006
	(2.289)	(1.036)
FemD2	0.053**	0.009*
	(2.491)	(1.724)
FemD3	0.133***	0.035***
	(4.406)	(3.949)
Controls, year and industry effects	✓	✓
N	25,164	25,164
R^2	0.258	0.300

Note: All variables are as described in Table 1. t-statistics are provided in parentheses.

*, **, *** indicate the level of significance at 10%, 5%, and 1%, respectively.

Source: Authors’ calculation.

Table 8. Endogeneity.

	SGR		SusGR1
Variable	(1)	(2)	(3)	(4)
Panel A: Two stage least square (2SLS)
WDD	0.098***		0.024***
	(4.683)		(3.853)
WDP		0.383***		0.101***
		(4.998)		(4.526)
Controls, year, and industry effects	✓	✓	✓	✓
n	21,364	21,364	21,184	21,184
R^2	0.257	0.255	0.299	0.298
Panel B: Propensity score matching (PSM)
WDD	0.047***		0.010*
	(2.614)		(1.919)
WDP		0.244***		0.068***
		(3.615)		(3.457)
Controls, year, and industry effects	✓	✓	✓	✓
n	18,220	18,220	18,030	18,030
R^2	0.254	0.255	0.301	0.301
Panel C: The lagged measure of gender diversity
	(4.275)		(3.683)
LWDD	0.069***		0.017***
LWDP		0.300***		0.083***
		(4.583)		(4.366)
Controls, year, and industry effects	✓	✓	✓	✓
n	21,364	21,364	21,184	21,184
R^2	0.258	0.256	0.299	0.298
Panel D: Fixed effect method
	(1.811)		(2.216)
WDD	0.026*		0.009**
FDP		0.126**		0.037*
		(1.985)		(1.899)
Controls, year, and industry effects	✓	✓	✓	✓
n	25,164	25,164	24,984	24,984
R^2	0.285	0.276	0.304	0.304

Note: All variables are as described in Table 1. t-statistics are provided in parentheses.

*, **, *** indicate the level of significance at 10%, 5%, and 1%, respectively.

Source: Authors’ calculation.

Table 9. Alternative measure of gender diversity.

	SGR		SusGR1
Variable	(1)	(2)	(3)	(4)
BLAU	0.218***		0.056***
	(4.461)		(3.904)
SHANNON		0.144***		0.036***
		(4.373)		(3.729)
Controls, year and industry effects	✓	✓	✓	✓
n	25,164	25,164	24,984	24,984
R^2	0.258	0.258	0.300	0.300

Note: All variables are as described in Table 1. t-statistics are provided in parentheses.

*, **, *** indicate the level of significance at 10%, 5%, and 1%, respectively.

Source: Authors’ calculation.