Female representation in the boardroom and firm debt: empirical evidence from Italy

Using a panel dataset of non-financial public companies in Italy covering the period 2005–2013, this paper provides an empirical analysis of the relationship between female representation on corporate boards and corporate debt. The presence of women in the boardroom might seem to push significantly on debt leverage and suggest a complementary role in the control and monitoring of agency costs. However, consistent with Kanter’s (Am J Sociol 82(5), 965–990, 1977) critical mass theory, that at a level of tokenism women take on a complementary role and at greater levels, their role either becomes a substitute for debt level, or plays a weaker complementary role in debt level and in the monitoring of agency costs. The presence of women board members who are linked to the family firm appears to significantly decrease the degree of debt leverage. Furthermore, the presence of greater female representation in the boardroom decreases the agency costs to the firm.