Journal Articles
Permanent URI for this collectionhttps://mro.massey.ac.nz/handle/10179/7915
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Item Do female directors affect the cost of equity capital?(Emerald Publishing Limited, 2025-11-25) Bhuiyan MBU; Nadeem M; Wu EPurpose – We investigate the effect of female directors on the firm cost of equity capital. Design/methodology/approach – We employ several analytical techniques, including univariate analysis, Ordinary Least Square regressions, and propensity score matching methodology. Our sample consists of US public firms from 2004–2018. Findings – We find that firms can reduce their cost of equity capital when they have female directors on the board. We reveal that board gender diversity reduces the cost of equity by curbing firm information asymmetry. Our findings are consistent across several alternative contexts for a female director and are robust to endogeneity concerns. Also, we find a negative association between female directorship and the cost of equity capital is notably accentuated during the growth and mature stages of the firm life cycle. Our findings add to the growing literature on the business case for female representation on corporate boards. Research limitations/implications – Our study shows that gender-diverse boards can reduce a firm’s cost of equity capital. Shareholders perceive female directors as enhancing governance quality and lowering expected returns. Firms can leverage these insights by increasing female representation on the board, influencing their cost of equity and capital structure decisions. This has significant implications for firms and regulators promoting gender diversity. Originality/value – Extant corporate governance research suggests that female directors improve firms’ governance and monitoring. Consistently, we have evidence that shareholders place value on gender diversity on boards and expect lower returns from firms with gender-diverse boards compared to those with all-male boards.Item Audit report lag and the cost of equity capital(Emerald Publishing Limited, 2024-10-21) Bhuiyan MBU; Man Y; Lont DHPurpose This research investigates the effect of audit report lag on the cost of equity capital. We argue that an extended audit report lag reduces the value of information and raises concerns for investors, resulting in an increased cost of equity capital. Design/methodology/approach We hypothesize that audit report lag increases the firm cost of equity capital. We conduct ordinary least squares (OLS) regression analyses to examine our hypothesis. Finally, we also perform a range of sensitivity tests to examine the hypothesis and robustness of findings. Findings Using a sample of the listed US firms from 2003 to 2018, we find that firms with higher audit report lag have a higher cost of equity capital. Our findings are economically significant as one standard deviation increase in audit report lag raises 3.82 basis points of cost of equity capital. Furthermore, our results remain robust to endogeneity concerns and alternative proxies for the cost of equity capital measures. Finally, we confirm that audit report lag increases the firm cost of equity capital through increasing information asymmetry and future financial restatement as a mediating channel. Originality/value We contribute to the theoretical discussion about the role of audit report lag and investors' perceptions. Overall, our results suggest that audit report lag affects a firm cost of equity capital.