Gender board diversity and the cost of bank loans

Karavitis, P. , Kokas, S. and Tsoukas, S. (2021) Gender board diversity and the cost of bank loans. Journal of Corporate Finance, 71, 101804. (doi: 10.1016/j.jcorpfin.2020.101804)

Abstract

We examine the relationship between female board representation and the cost of lending, using a dataset of 13,714 loans from 386 banks matched with 2432 non-financial firms from 1999 to 2013. We find that firms with female directors command lower loan spreads. In addition, female independent directors have a stronger impact on lowering spreads compared to female directors' other attributes. However, as firms build relationships with their lenders this effect becomes less potent. Finally, when we introduce firm-level heterogeneity we document that changes in gender diversity exert a stronger impact on the cost of lending in the case of bank-dependent firms, especially for relationship borrowers.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Karavitis, Dr Panagiotis and Tsoukas, Professor Serafeim
• Authors: Karavitis, P., Kokas, S., and Tsoukas, S.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Journal of Corporate Finance
• Publisher: Elsevier
• ISSN: 0929-1199
• ISSN (Online): 1872-6313
• Published Online: 09 January 2021
• Copyright Holders: Copyright © 2021 Elsevier
• First Published: First published in Journal of Corporate Finance 71: 101804
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher