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Corporate governance and risk taking: the role of board gender diversity

Author

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  • Heba Abou-El-Sood

Abstract

Purpose - This paper aims to investigate the association between board gender diversity and bank risk taking in an emerging market context. Design/methodology/approach - The association between female board directorship and bank risk taking is examined, while controlling for board characteristics, managerial, concentrated, family and government ownership. Two-stage regression with instrumental variables is used for a sample of banks listed in Gulf Cooperation Council (GCC) countries during 2002-2014. Findings - Results show that banks with more female board directors invest in less risky positions; the association is attenuated when the regulatory capital is larger, providing protection against risky investments, and female directors tend to invest less in risky asset positions in Islamic banks relative to conventional banks. Practical implications - The relevance of the findings stems from the recent initiatives undertaken by the Basel Committee to address deficient corporate governance structures that lead to bank breakdowns and the diversified economy of the fast-growing GCC market, relying on banking services in the aftermath of the oil price drop. Originality/value - This paper provides novel evidence on the influence of board gender diversity on bank risk taking in an emerging market context. This paper fills a gap in prior research by examining bank-specific regulatory capital adequacy and Islamic banking aspects.

Suggested Citation

  • Heba Abou-El-Sood, 2018. "Corporate governance and risk taking: the role of board gender diversity," Pacific Accounting Review, Emerald Group Publishing Limited, vol. 31(1), pages 19-42, August.
  • Handle: RePEc:eme:parpps:par-03-2017-0021
    DOI: 10.1108/PAR-03-2017-0021
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    Citations

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    Cited by:

    1. Song, Jun Myung & Chung, Chune Young, 2023. "Female CEOs and investment efficiency in the Vietnamese market," Finance Research Letters, Elsevier, vol. 58(PA).

    More about this item

    Keywords

    Emerging markets; Islamic banks; Corporate governance; Gender diversity; Risk taking; G21; G28; G30; G32; J16; M14;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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