Sustainable Development Goals and Capital Structure as Drivers of Financial Performance: Evidence on the Moderating Effect of Gender Diversity on the Board of Directors

This study seeks to expand on previous research on SDGs implementation and firms’ financing structures as mechanisms that elevate financial outcomes. Furthermore, this study assesses the moderating influence exerted by gender-diverse boards on the interplay connecting SDGs with both capital structure and financial results. This investigation adopts a quantitatively driven design anchored in a causal-explanatory framework. The units of analysis comprise non-financial entities operating in Indonesia that have obtained listing status on the IDX. This study employed a purposive sampling strategy, while the empirical estimation was executed through a parametric-based panel regression framework facilitated by the EViews. The research findings provide empirical evidence that both SDGs implementation and capital structure contribute positively to enhancing its financial outcomes. Further findings indicate that variations in board-level gender composition meaningfully reshape the strength of the SDGs and performance linkage. The final finding confirms that the linkage between leverage decisions and financial results remains unchanged regardless of the gender mix present on the board of directors. This research is significant for several reasons. First, this study is the first in Indonesia by embedding gender-balanced board representation into the evaluative model, positioning it as a conditioning variable that reframes the interplay among SDGs, leverage decisions, and performance results. This effort is expected to address the inconsistencies of previous research and clarify this relationship. Second, this study advances theoretical expansion on how SDGs, financing decisions, and corporate performance interact within the Signaling Theory, Trade-Off Theory, and Upper Echelons Theory.