Female Representation in the Boardroom and Firm Debt: Empirical Evidence from Italy

Journal of Economics and Finance, Forthcoming

Posted: 7 Jul 2017

See all articles by Fabrizio Rossi

Fabrizio Rossi

University of Cassino and Southern Lazio

Richard J. Cebula

Armstrong Atlantic State University; Jacksonville University (Florida)

James R. Barth

Auburn University; Milken Institute

Date Written: July 4, 2017

Abstract

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.

Keywords: Agency costs, Corporate governance, Critical mass, Debt, Female representation on corporate boards of directors, Panel data,

JEL Classification: G32, J16, G34

Suggested Citation

Rossi, Fabrizio and Cebula, Richard J. and Barth, James R., Female Representation in the Boardroom and Firm Debt: Empirical Evidence from Italy (July 4, 2017). Journal of Economics and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2997076

Fabrizio Rossi (Contact Author)

University of Cassino and Southern Lazio ( email )

Via G. Di Biasio, 43
Cassino, Frosinone 03043
Italy

Richard J. Cebula

Armstrong Atlantic State University ( email )

11935 Abercorn Street
Savannah, GA 31419
912-921-3781 (Phone)
912-921-3782 (Fax)

Jacksonville University (Florida) ( email )

Jacksonville, FL 32211
United States

James R. Barth

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States
334-844-2469 (Phone)
334-844-4960 (Fax)

Milken Institute ( email )

1250 Fourth Street
Santa Monica, CA 90401
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
193
PlumX Metrics