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Does Board Gender Diversity Really Improve Financial Performance and Default Risk? Evidence from Romanian Companies Engaged in International Trade

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  • Tanasuica Coralia

    (1 The Bucharest University of Economic Studies, Romania)

Abstract

Currently, in the business world, important attempts are being made to assess the possibility of verifying the creditworthiness of companies by going beyond traditional financial data and incorporating alternative data as well. Does the fact that the board of a company has a certain structure influence the financial health of that company? The paper’s objective is to ascertain if there is a correlation between the board of directors’ gender diversity, financial performance, and the probability of default for that respective company. The empirical study examined a sample of Romanian companies engaged in international trade. Using natural language processing techniques, I predicted the gender of the respective director by his/her first name. The second step of the research was the analysis of the correlation between the percentage of women on the board and traditional financial indicators such as profit or turnover, and the correlation between the percentage of women on the board and that company’s probability of default. The results show that there is generally not a strong correlation between the percentage of women on the board of the company and the other financial and risk indicators at the entire population level, but there is a strong correlation for some specific industries such as education, meaning that there are industries were the presence of women in board really impacts the performance of the business.

Suggested Citation

  • Tanasuica Coralia, 2023. "Does Board Gender Diversity Really Improve Financial Performance and Default Risk? Evidence from Romanian Companies Engaged in International Trade," Journal of Social and Economic Statistics, Sciendo, vol. 12(1), pages 84-107, July.
    • Handle: RePEc:vrs:jsesro:v:12:y:2023:i:1:p:84-107:n:2
    DOI: 10.2478/jses-2023-0005
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    References listed on IDEAS

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    1. Liesa Schrand & Claudia Ascherl & Wolfgang Schaefers, 2018. "Gender diversity and financial performance: evidence from US REITs," Journal of Property Research, Taylor & Francis Journals, vol. 35(4), pages 296-320, October.
    2. Amélie Charles & Etienne Redor & Constantin Zopounidis, 2015. "The determinants of the existence of a critical mass of women on boards: A discriminant analysis," Economics Bulletin, AccessEcon, vol. 35(3), pages 1809-1819.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Board Behaviour; Diversity; Corporate Default; Gender; Correlation;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • 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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