Cost of equity, debt financing policy, and the role of female directors

Figures & data

Table 1. Descriptive statistics

Variables		N	Mean	Median	Std.	Min	Max	p1	p99	Firms with female	Firms without female	Paired sample t-test
CoE_Mean		4619	0.104	0.086	0.064	0.022	0.239	0.036	0.299	0.101	0.113	5.978***
CoE_OJN		4619	0.041	0.031	0.107	0.001	0.113	0.006	0.190	0.033	0.058	6.361***
CoE_GLS		4619	0.096	0.081	0.084	0.001	0.259	0.005	0.406	0.093	0.103	3.278***
CoE_Pout		4619	0.193	0.110	0.189	0.019	0.692	0.042	0.877	0.193	0.192	−0.083
CoE_RCT		4619	0.086	0.077	0.052	0.002	0.182	0.023	0.258	0.081	0.101	11.845***
%Female		4619	0.137	0.125	0.109	0	0.667	0	0.444	0.184	0	−73.792***
Debt/TA		4619	0.215	0.188	0.182	0	0.947	0	0.707	0.230	0.171	−9.610***
Beta		3557	0.948	0.923	0.335	−1.157	2.537	0.141	2.042	0.944	0.956	0.704
Disc_Share		4566	−5.960	−6.087	1.62	−11.034	11.521	−9.047	0.210	−6.048	−5.599	8.837***
LT_Growth		4619	0.200	0.134	0.528	−0.704	24	−0.204	1.237	0.191	0.228	2.122**
LogBSize		4619	0.949	0.954	0.116	0.602	1.505	0.699	1.204	0.983	0.851	−38.647***
%IND		4619	0.910	0.8	0.402	0	3.778	0.273	1.875	0.957	0.774	−13.720***
B_Dual		4619	0.902	1	0.297	0	1	0	1	0.900	0.907	0.633
CEO_BTenure		4588	0.796	0.848	0.471	−1	1.776	−0.523	1.612	0.788	0.820	1.980**
LogTA		4619	3.388	3.376	0.744	−0.374	6.419	1.741	5.363	3.546	2.924	−26.602***
BV_Share		4619	16.447	13.590	10.869	3.067	42.490	3.067	42.490	17.482	13.419	−11.227***
Sales/Assets		4619	0.917	0.738	0.849	−0.009	13.177	0.037	3.703	0.885	1.010	1.790***
PPE/Assets		4619	0.407	0.291	0.397	0	3.897	0	1.458	0.412	0.390	−1.682**
ROA		4619	0.075	0.054	0.620	−0.173	42.076	0.002	0.272	0.062	0.111	2.334***

Note: This table reports descriptive statistics of all variables used in our empirical models. ***p < 0.01, **p < 0.05, *p < 0.1.

Table 2. Correlation matrix

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)	(14)
1.%Female	1
2.Debt/TA	0.139*	1
3.Beta	−0.042	−0.133*	1
4.DISP	−0.021	0.001	−0.013	1
5.LT_Growth	−0.031	0.004	−0.012	−0.015	1
6.LogBSize	0.352*	0.117*	−0.016	−0.018	−0.006	1
7.%IND	0.191*	0.004	0.101*	−0.009	−0.014	0.206*	1
8.B_Dual	−0.033	−0.043*	−0.047*	0.003	0.021	−0.013	0.014	1
9.CEO_BTenure	−0.054*	−0.121*	0.015	−0.006	0.003	−0.079*	0.056*	0.103*	1
10.LogTA	0.319*	0.315*	−0.077*	−0.011	−0.009	0.596*	0.279*	−0.030	−0.068*	1
11.BV_Share	0.066*	−0.029	−0.050*	0.005	0.003	0.183*	0.021	0.007	0.083*	0.3114*	1
12.Sales/Assets	−0.031	−0.142*	0.133*	0.077*	0.001	−0.140*	−0.012	−0.029	0.061*	−0.279*	−0.103*	1
13.PPE/Assets	0.056*	0.207*	0.074*	0.009	−0.004	−0.007	0.064*	0.040*	−0.041*	0.023	−0.019	0.152*	1
14.ROA	−0.024	−0.034	−0.020	−0.0007	−0.005	−0.030	−0.018	−0.003	−0.033	−0.097*	−0.024	0.013	−0.004	1

Notes: This table reports correlation matrix among independent variables used in our empirical models. * denotes significance level of 1%.

Table 3. Trend analysis: Firm capital structure and cost of equity by the interval categories of % female directors

Panel A
Capital structure
Intervals	<10%	10–19%	19–29%	29–39%	39–100%	39–49%	49–59%	59–69%	69–79%	79–89%	89–99%	99%-100%
N	1726	1484	1048	265	101	71	27	3	0	0	0	0
%	37.3%	32.1%	22.7%	5.7%	2.2%	1.5%	0.6%	0.1%	0	0	0	0
Debt/TA	0.190	0.217	0.238	0.268	0.233	0.223	0.253	0.300	-	-	-	-
Diff		0.027	0.021	0.030	−0.035
LT_Debt/TA	0.164	0.186	0.201	0.233	0.203	0.196	0.216	0.261	-	-	-	-
Diff		0.022	0.015	0.032	−0.030
ST_Debt/TA	0.026	0.031	0.032	0.035	0.030	0.027	0.036	0.039	-	-	-	-
Diff		0.005	0.001	0.003	−0.005
Panel B
Cost of equity
Intervals	<10%	10–19%	19–29%	29–39%	39–100%	39–49%	49–59%	59–69%	69–79%	79–89%	89–99%	99%-100%
N	1726	1484	1048	265	101	71	27	3	0	0	0	0
%	37.3%	32.1%	22.7%	5.7%	2.2%	1.5%	0.6%	0.1%	0	0	0	0
CoE_Mean	0.084	0.076	0.074	0.070	0.067	0.064	0.075	0.091	-	-	-	-
Diff		−0.008	−0.002	−0.004	−0.003
CoE_OJN	0.024	0.011	0.009	0.008	0.003	0.004	0.001	−0.012	-	-	-	-
Diff		−0.013	−0.002	−0.001	−0.005
CoE_GLS	0.072	0.071	0.066	0.065	0.061	0.060	0.070	0.026	-	-	-	-
Diff		−0.001	−0.005	−0.001	−0.004
CoE_Pout	0.170	0.165	0.170	0.156	0.154	0.139	0.185	0.332	-	-	-	-
Diff		−0.005	0.005	−0.014	−0.002
CoE_RCT	0.070	0.058	0.052	0.050	0.049	0.050	0.044	0.018	-	-	-	-
Diff		−0.012	−0.006	−0.002	−0.001

Note: This table reports the trend analysis results identifying a firm’s capital structure and cost of equity for every incremental change in percentage of female directors on board proxy measure.

Figure 1. Firm capital structure by the interval categories of % female directors.

Figure 2. Firm cost of equity by the interval categories of % female directors.

Table 4. Effects of board gender diversity on firm capital structure

	Panel A: OLS regressions			Panel B: GMM
	(1)	(2)	(3)	(4)	(5)	(6)
Variables	Debt/TA	LT_Debt/TA	ST_Debt/TA	Debt/TA	LT_Debt/TA	ST_Debt/TA
%Female	0.221***	0.229***	−0.008	0.783**	0.691**	0.099
	(0.070)	(0.064)	(0.025)	(0.339)	(0.327)	(0.142)
(%Female)^2	−0.405**	−0.425**	0.019	−1.648**	−1.511**	−0.194
	(0.180)	(0.165)	(0.0567)	(0.776)	(0.737)	(0.319)
Beta	−0.046***	−0.046***	−0.000	0.002	−0.002	0.0029
	(0.007)	(0.007)	(0.002)	(0.005)	(0.005)	(0.002)
DISP	−0.002	−0.004**	0.001**	−0.001	−0.001	0.000
	(0.002)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)
LT_Growth	0.009	0.005	0.004**	0.003	−0.000	0.004***
	(0.005)	(0.006)	(0.001)	(0.002)	(0.002)	(0.001)
LogBSize	−0.202***	−0.197***	−0.005	−0.108**	−0.110**	0.009
	(0.032)	(0.029)	(0.017)	(0.046)	(0.044)	(0.020)
%IND	−0.051***	−0.041***	−0.010***	−0.010	−0.003	−0.008**
	(0.007)	(0.007)	(0.002)	(0.007)	(0.007)	(0.003)
B_Dual	−0.017	−0.025**	0.007**	0.001	−0.003	0.004
	(0.011)	(0.010)	(0.003)	(0.007)	(0.007)	(0.003)
CEO_BTenure	−0.032***	−0.035***	0.002	0.012	−0.012	0.020*
	(0.006)	(0.006)	(0.002)	(0.025)	(0.025)	(0.011)
LogTA	0.097***	0.074***	0.022***	0.014***	0.010**	0.009***
	(0.006)	(0.005)	(0.002)	(0.004)	(0.004)	(0.002)
BV_Share	−0.001***	−0.001***	−0.001***	−0.001***	−0.001***	−0.000**
	(0.000)	(0.000)	(0.00)	(0.000)	(0.000)	(0.000)
Sales/Assets	−0.011***	−0.013***	0.001	−0.000918	−0.00268	0.00264
	(0.003)	(0.003)	(0.001)	(0.003)	(0.003)	(0.002)
PPE/Assets	0.097***	0.115***	−0.017***	0.020***	0.022***	−0.004*
	(0.007)	(0.007)	(0.002)	(0.006)	(0.005)	(0.002)
ROA	−0.001	−0.001	0.001	−0.160***	−0.118***	−0.066***
	(0.535)	(0.001)	(0.001)	(0.053)	(0.045)	(0.022)
Debt/TAt-1				0.841***
				(0.022)
LT_Debt/TAt-1					0.833***
					(0.024)
ST_Debt/TAt-1						0.533***
						(0.079)
Constant	0.160***	0.178***	−0.0179	0.065	0.075*	0.000
	(0.0339)	(0.0318)	(0.0143)	(0.197)	(0.098)	(0.00)
Year-fixed effect	Yes	Yes	Yes	Yes	Yes	Yes
Observations	3,485	3,485	3,485	1,592	1,592	1,592
Number of firms	652	652	652	652	652	652
R-squared	0.208	0.201	0.067
Wald Chi 2	43.21***	40.04***	11.95***	6390***	6839***	1147***
AR(1) (p-value)				0.000	0.000	0.000
AR(2) (p-value)				0.314	0.184	0.471
Hansen test (p-value)				0.527	0.301	0.124

Notes: This table reports OLS (Panel A: model 1) and GMM regression results on the association between board gender diversity and firm capital structure. The dependent variable is measured by debt to total assets (Debt/TA), long-term debt to total assets (LT_Debt/TA) and short-term debt to total assets (ST_Debt/TA). Our main independent variable is the percentage of female directors serving on the board of directors (%Female). The square term of %Female ((%Female)2) is included to test for the non-linear effect of %Female on the capital structure. Control variables include beta of the firm (Beta), analysts forecast dispersion per share price (Disc_Share), long-term growth (LT_Growth), board size (LogBSize) measured by log of the total number of directors on board, board independence (%IND) proxied by the percentage of independent directors serving on board, Chair-CEO duality (B_Dual) taking value of 1 if chair and CEO is the same person and 0 otherwise, CEO board tenure (CEO_BTenure) measured by the average number of years CEO serving on board, firm size (LogTA) measured by log of total assets, board value per share (BV_Share), sale to total assets (Sale/Assets), property, plant and equipment to total assets(PPE/Assets), and return on assets (ROA). Robust standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.

Table 5. Effects of board gender diversity on firm cost of equity

	Panel A: OLS results					Panel B: GMM
	(1)	(2)	(3)	(4)	(5)	(6)
Variables	CoE_Mean	CoE_OJN	CoE_GLS	CoE_RCT	CoE_Pout	CoE_Mean
CoE_Mean t-1						0.290**
						(0.117)
%Female	−0.054**	−0.044**	−0.042***	−0.122***	0.001	−0.208**
	(0.026)	(0.020)	(0.007)	(0.024)	(0.075)	(0.091)
(%Female)^2	0.082	0.035	0.029	0.162***	0.101	0.320
	(0.058)	(0.042)	(0.083)	(0.049)	(0.180)	(0.195)
Beta	0.004*	0.002	0.013***	0.008***	−0.005	0.003
	(0.002)	(0.001)	(0.003)	(0.002)	(0.007)	(0.003)
DISP	0.004***	0.003***	0.001	0.004***	0.008***	0.001
	(0.001)	(0.001)	(0.001)	(0.001)	(0.002)	(0.001)
LT_Growth	−0.001	o.oo1	−0.001	0.001	−0.007	−0.002*
	(0.001)	(0.001)	(0.002)	(0.003)	(0.005)	(0.001)
LogBSize	0.026**	0.021**	0.002	0.021*	0.061	0.048
	(0.013)	(0.009)	(0.015)	(0.012)	(0.039)	(0.064)
%IND	−0.003	−0.003**	−0.004	−0.006***	−0.002	0.001
	(0.002)	(0.001)	(0.003)	(0.001)	(0.009)	(0.014)
B_Dual	0.004	0.001	−0.016*	0.001	0.031***	0.002
	(0.003)	(0.001)	(0.009)	(0.003)	(0.009)	(0.005)
CEO_BTenure	−0.001	−0.003**	−0.004*	−0.001	0.002	0.002
	(0.001)	(0.001)	(0.002)	(0.001)	(0.006)	(0.003)
LogTA	−0.003	−0.008***	−0.002	−0.002	−0.001	0.023
	(0.002)	(0.001)	(0.002)	(0.002)	(0.006)	(0.026)
BV_Share	0.088	−0.002**	0.001	−0.001	0.001	−0.001
	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)
Sales/Assets	−0.006***	−0.001	0.004***	0.001	−0.031***	0.004
	(0.001)	(0.001)	(0.001)	(0.001)	(0.004)	(0.005)
PPE/Assets	0.004	0.003	−0.002	−0.005**	0.024***	0.006
	(0.003)	(0.005)	(0.004)	(0.002)	(0.007)	(0.005)
ROA	0.038***	0.155***	0.002**	−0.001**	−0.001	−0.068*
	(0.001)	(0.001)	(0.001)	(0.001)	(0.003)	(0.038)
Constant	0.137***	0.081***	0.124***	0.125***	0.216***	0
	(0.011)	(0.007)	(0.015)	(0.010)	(0.0360)	(0)
Year-fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Observations	3,485	3,485	3,485	3,485	3,485	1,566
R-squared	0.217	0.876	0.035	0.086	0.054
Wald Chi 2	73.59***	3425***	4.38***	9.41***	6.27***
AR (1) (p-value)						0.000
AR (2) (p-value)						0.875
Hansen test (p-value)						0.504
Number of firms	652	652	652	652	652	652

Notes: This table reports OLS (Panel A: models 2) and GMM regression results on the association between board gender diversity and firm cost of equity. The dependent variable is measured by CoE_OJN, CoE_GLS, CoE_Pout, CoE_RCT and the mean of these four measures (CoE_Mean). Our main independent variable is the percentage of female directors serving on the board of directors (%Female). The square term of %Female ((%Female)2) is included to test for the non-linear effect of %Female on the capital structure. Control variables include beta of the (Beta), analysts forecast dispersion per share price (Disc_Share), long-term growth (LT_Growth), board size (LogBSize) measured by log of the total number of directors on board, board independence (%IND) proxied by the percentage of independent directors serving on board, Chair-CEO duality (B_Dual) taking value of 1 if chair and CEO is the same person and 0 otherwise, CEO board tenure (CEO_BTenure) measured by the average number of years CEO serving on board, firm size (LogTA) measured by log of total assets, board value per share (BV_Share), Sale to total assets (Sale/Assets), property, plant and equipment to total assets(PPE/Assets), and return on assets (ROA). Robust standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.

Table 6. Four-step mediating effects: board gender diversity, capital structure and firm cost of equity

	Panel A: OLS regressions				Panel B: GMM
	(1) Step 1	(2) Step 2	(3) Step 3	(4) Step 4	(5) Step 1	(6) Step 2	(7) Step 3	(8) Step 4
Variables	Debt/TA	CoE_Mean	CoE_Mean	CoE_Mean	Debt/TA	CoE_Mean	CoE_Mean	CoE_Mean
%Female	0.221***		−0.054**	−0.031	0.783**		−0.193**	−0.097
	(0.070)		(0.026)	(0.027)	(0.339)		(0.088)	(0.064)
(%Female)^2	−0.405**		0.082	0.046	−1.648**		0.277	0.184
	(0.180)		(0.058)	(0.062)	(0.776)		(0.184)	(0.127)
Debt/TA		0.030***		0.060***		0.111*		0.037**
		(0.001)		(0.008)		(0.059)		(0.016)
Beta	−0.046***	0.006**	0.004*	0.010**	0.001	0.004	0.004	0.003
	(0.007)	(0.002)	(0.002)	(0.004)	(0.005)	(0.007)	(0.005)	(0.003)
DISP	−0.002	0.004***	0.004***	0.002***	−0.001	0.001	0.001	0.001*
	(0.002)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)
LT_Growth	0.009	−0.002	−0.001	−0.003*	0.003	−0.003*	−0.002*	−0.003*
	(0.005)	(0.001)	(0.001)	(0.001)	(0.002)	(0.002)	(0.001)	(0.001)
LogBSize	−0.202***	0.023*	0.026**	0.001	−0.108**	0.252*	0.049	0.014
	(0.032)	(0.011)	(0.013)	(0.012)	(0.046)	(0.143)	(0.064)	(0.032)
%IND	−0.05***	−0.002	−0.003	0.004*	−0.010	0.072	0.001	0.007
	(0.007)	(0.002)	(0.002)	(0.002)	(0.007)	(0.057)	(0.016)	(0.008)
B_Dual	−0.017	0.004	0.004	0.003	0.001	0.052*	0.001	−0.001
	(0.011)	(0.003)	(0.003)	(0.004)	(0.007)	(0.027)	(0.005)	(0.004)
CEO_BTenure	−0.032***	−0.001	−0.001	−0.002	0.012	−0.003	0.001	0.001
	(0.006)	(0.002)	(0.001)	(0.001)	(0.025)	(0.024)	(0.003)	(0.002)
LogTA	0.097***	−0.007***	−0.003	−0.014***	0.014***	−0.110*	0.018	0.002
	(0.006)	(0.002)	(0.002)	(0.002)	(0.004)	(0.061)	(0.026)	(0.006)
BV_Share	−0.001***	0.001	0.001	0.001	−0.001***	0.001*	−0.001	−0.001
	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)	(0.001)
Sales/Assets	−0.011***	−0.006***	−0.006***	0.002	−0.001	−0.014	0.002	−0.005
	(0.003)	(0.001)	(0.001)	(0.002)	(0.003)	(0.009)	(0.005)	(0.004)
PPE/Assets	0.097***	0.001	0.004	0.001	0.020***	−0.002	0.006	0.004
	(0.007)	(0.003)	(0.003)	(0.005)	(0.006)	(0.009)	(0.005)	(0.010)
ROA	−0.001	0.038***	0.038***	0.038***	−0.160***	−0.128**	−0.082**	−0.035
	(0.002)	(0.0001)	(0.001)	(0.001)	(0.050)	(0.060)	(0.035)	(0.039)
Debt/TAt-1					0.840***
					(0.022)
Mean_CoEt-1						0.205*	0.290**	0.227***
						(0.112)	(0.119)	(0.056)
Constant	0.160***	0.140***	0.137***	0.195***	0.059	0.000	0.000	0.088**
	(0.0339)	(0.0107)	(0.0112)	(0.0379)	(0.049)	(0.000)	(0000)	(0.034)
Year-fixed effect	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	3,485	3,485	3,485	3,485	1,566	1,566	1,566	1,566
Number of firms	652	652	652	652	652	652	652	652
R-squared	0.208	0.221	0.217	0.349
Wald Chi 2	43.21***	87.02***	73.59***	77.58***	6390***	49.35***	116***	128***
AR (1) (p-value)					0.000	0.000	0.000	0.000
AR (2) (p-value)					0.314	0.826	0.941	0.845
Hansen test (p-value)					0.527	0.905	0.535	0.528

Notes: This table reports OLS (Panel A) and GMM (Panel B) regression results on the four-step mediating effects of board gender diversity on firm cost of equity via firm capital structure (Models 3–6). The dependent variable is measured by Debt/TA (model 1 and model 5) and CoE_Mean (models 2–4 and models 6–8). Our main independent variable is the percentage of female directors serving on the board of directors (%Female). The square term of %Female ((%Female)2) is included to test for the non-linear effect of %Female on the capital structure. Control variables include beta of the firm (Beta), analysts forecast dispersion per share price (Disc_Share), long-term growth (LT_Growth), board size (LogBSize) measured by log of the total number of directors on board, board independence (%IND) proxied by the percentage of independent directors serving on board, Chair-CEO duality (B_Dual) taking value of 1 if chair and CEO is the same person and 0 otherwise, CEO board tenure (CEO_BTenure) measured by the average number of years CEO serving on board, firm size (LogTA) measured by log of total assets, board value per share (BV_Share), Sale to total assets (Sale/Assets), property, plant and equipment to total assets(PPE/Assets), and return on assets (ROA). Capital structure (Debt/TA) is included in models 2 and 4, and models 6 and 8. Robust standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.

Table 7. Propensity score matching (PSM) on the effect of board gender diversity on firm cost of equity and capital structure

Summary	Unmatched					Matched
No of obs=	3485					1866
Treated obs=	2552					933
Control obs	933					933
Panel A: Average treatment effects with nearest neighbour Matching method
			Treated	Control	Δ	S.E.	T-stat
1:1 matching without replacement
COE_Mean	Unmatched		0.101	0.115	-0.013***	0.002	-5.14
	Matched		0.102	0.115	-0.013***	0.003	-3.59
Debt/TA	Unmatched		0.226	0.168	0.058***	0.007	8.25
	Matched		0.205	0.168	0.036***	0.009	4.04
1:1 matching with replacement
COE_Mean	Unmatched		0.101	0.115	-0.013***	0.002	-5.14
	Matched		0.102	0.123	-0.021**	0.012	-1.70
Debt/TA	Unmatched		0.226	0.168	0.058***	0.007	8.25
	Matched		0.225	0.191	0.034*	0.028	1.21
Nearest neighbour (n=2)
COE_Mean	Unmatched		0.101	0.115	-0.013***	0.002	-5.14
	Matched		0.102	0.114	-0.012*	0.010	-1.14
Debt/TA	Unmatched		0.226	0.168	0.058***	0.007	8.25
	Matched		0.225	0.188	0.037*	0.027	1.37
Panel B: Average treatment effect on the treated with 1:1 nearest neighbour matching and bootstrapping of standard errors
	No of obs.	Replications	Observed (Δ)	Bias	S.E.	T-stat
COE_Mean	4619	100	-0.023***	0.006	0.013	-2.05
	4619	1000	-0.023***	0.004	0.012	-2.04
	4619	10000	-0.023***	0.003	0.012	-2.00
	4619	100	0.031***	0.002	0.011	3.08
Debt/TA	4619	1000	0.031***	0.001	0.011	3.02
	4619	10000	0.031***	0.001	0.010	3.01
Panel C: Regressions on matched samples
		(1)	(2)	(3)		(4)
VARIABLES		CoE_Mean	CoE_Mean	Debt/TA		Debt/TA
Female_dummy		-0.011***		0.031***
		(0.003)		(0.008)
%Female			-0.068**			0.229***
			(0.034)			(0.088)
(%Female)^2			0.060			-0.261*
			(0.105)			(0.268)
Beta		0.008**	0.008**	-0.050***		-0.050***
		(0.003)	(0.003)	(0.009)		(0.009)
Disc_Share		0.004***	0.004***	0.002		0.002
		(0.001)	(0.001)	(0.002)		(0.002)
LT_Growth		-0.002	-0.003	0.014*		0.014*
		(0.003)	(0.003)	(0.008)		(0.008)
LogBSize		0.057***	0.055***	-0.216***		-0.211***
		(0.018)	(0.018)	(0.047)		(0.047)
%IND		-0.006	-0.006	-0.062***		-0.062***
		(0.005)	(0.005)	(0.015)		(0.015)
B_Dual		0.001	0.001	-0.039***		-0.0392***
		(0.005)	(0.005)	(0.014)		(0.014)
CEO_BTenure		-0.005	-0.005	-0.031***		-0.0311***
		(0.003)	(0.003)	(0.008)		(0.008)
LogTA		-0.012***	-0.012***	0.134***		0.134***
		(0.003)	(0.003)	(0.008)		(0.008)
BV_Share		0.001	0.001	-0.001***		-0.001***
		(0.001)	(0.001)	(0.001)		(0.002)
Sales/Assets		-0.003*	-0.003*	-0.014**		-0.014**
		(0.002)	(0.002)	(0.005)		(0.005)
PPE/Assets		-0.001	-0.001	0.055***		0.053***
		(0.004)	(0.004)	(0.010)		(0.010)
ROA		0.037***	0.037***	0.002		0.002
		(0.001)	(0.001)	(0.004)		(0.004)
Constant		0.129***	0.131***	0.130***		0.126***
		(0.018)	(0.018)	(0.0473)		(0.0472)
Year fixed effects		YES	YES	YES		YES
Observations		1,866	1,866	1,866		1,866
R-squared		0.260	0.260	0.218		0.220

Notes: This table presents the PSM results of the average treatment effects (ATE) and the average treatment effect on the treated (ATT) with 1:1 nearest neighbour matching and bootstrapping of standard errors. The ATE and ATT of board gender diversity on the firm cost of equity and capital structure (Δ) are estimated by the difference between the mean changes of firms with female directors (column “Treated”) and that of matched firms without female directors (column “Non-treated”). p-Value in parentheses. t-Statistics with robust standard errors in final column. ***p < 0.01, **p < 0.05, *p < 0.1.

Table

Variable	Definition	Measurement
Debt/TA	Debt to total assets	Total-debt-to-total-assets ratio
LT_Debt/TA	Long-term debt to total assets	Long-term debt-to-total-assets ratio
ST_Debt/TA	Short-term debt to total assets	Short-term debt-to-total-assets ratio
COE	Implied cost of equity	The average of four implied cost of equity estimates (RCT, RGLS, RMPEG and ROJ) minus risk-free rate
ROJ	Implied cost of equity	Implied cost of equity based on Ohlson and Juettner-Nauroth (2005) model minus risk-free rate
RGLS	Implied cost of equity	Implied cost of equity based on Gebhardt, Lee, and Swaminathan (2001) minus risk-free rate.
RMPEG	Implied cost of equity	Implied cost of equity based on Modified Easton (2004) cost of equity module by Gode and Mohanram (2003) minus risk-free rate.
RCT	Implied cost of equity	Implied cost of equity based on Claus and Thomas (2001) model minus risk-free rate.
%Female	Female in the board of directors	The percentage of female directors serving on the board of directors
%Female^2	The square term of %Female	The square term of the percentage of female directors serving on the board of directors
Beta	Industry beta	Average beta of industry in which firms are operating
DISP	Analysts forecast dispersion	Standard deviation of the forecast earnings per share for a year ahead
LT_Growth	Long-term growth	The consensus of long-term growth forecast
%IND	Board independence	The percentage of independent directors serving on board
B_Dual	Chair-CEO duality	Dummy variable that take value of 1 if chair and CEO is the same person and 0 otherwise
CEO_BTenure	CEO board tenure	The average number of years CEO serving on board
LogTA	Firm size	Natural logarithm of total assets
BV_Share	Book value per share	Book value per share
Sale/Assets	Sale/Assets	Sale-to-total-assets ratio
PPE/Assets	PPE/Assets	Property, plant, and equipment-to-total-assets ratio
ROA	Return on assets	Return on assets ratio

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