Effect of board gender diversity on the financial performance of microfinance institutions: Does judicial efficiency matter?

The impact of board gender diversity on the financial performance of firms is not known. This is because empirical investigations have yielded inconclusive outcomes. This study engages data from 408 microfinance institutions (MFIs) covering the period 2010–2018 from the six microfinance regions to i...

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Bibliographic Details
Published in:Annals of public and cooperative economics 2023-06, Vol.94 (2), p.495-518
Main Authors: Sarpong‐Danquah, Beatrice, Adusei, Michael, Magnus Frimpong, Joseph
Format: Article
Language:English
Subjects:
board gender diversity
Dummy
Financial performance
Gender
judicial efficiency
Microfinance
microfinance institutions
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Summary:The impact of board gender diversity on the financial performance of firms is not known. This is because empirical investigations have yielded inconclusive outcomes. This study engages data from 408 microfinance institutions (MFIs) covering the period 2010–2018 from the six microfinance regions to investigate this impact using the Least Squares Dummy Variable (LSDV) and the System Generalized Method of Moments (SYS‐GMM) estimation techniques. The study also explores whether judicial efficiency exerts any significant effect on the board gender diversity–financial performance nexus. The study observes that board gender diversity exhibits a strong negative effect on the financial performance of MFIs. The study also observes that the effect of board gender diversity on the financial performance of MFIs escalates in the presence of judicial inefficiency. The study, therefore, unveils the judicial system as a channel through which gender diversity drives the financial performance of MFIs negatively.
ISSN:1370-4788
1467-8292
DOI:10.1111/apce.12396