Journal Articles

Permanent URI for this collectionhttps://mro.massey.ac.nz/handle/10179/7915

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    Do female directors affect the cost of equity capital?
    (Emerald Publishing Limited, 2025-11-25) Bhuiyan MBU; Nadeem M; Wu E
    Purpose – 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.
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    Business strategy and strategic deviation in accounting, finance, and corporate governance: A review of the empirical literature
    (John Wiley and Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand, 2024-03-21) Habib A; Ranasinghe D; Perera A
    We review the empirical archival literature on the consequences of business strategy and strategic deviation on accounting, finance, and corporate governance outcomes. We use Miles and Snow's (Organizational strategy, structure, and process. McGraw-Hill, 1978; Organizational strategy, structure and process. Stanford University Press, 2003) strategy typology that has been quantified using financial statement data by Bentley et al. (Contemporary Accounting Research, 2013, 30, 780). Research has used this strategy score to investigate the consequences of firms following two distinct strategies namely, prospectors versus defenders, on various organisational outcomes. Our survey provides mixed evidence on the relationship between business strategy, financial reporting quality, finance outcomes, and corporate governance including corporate social responsibility (CSR) activities. We offer some suggestions for future research.