Essays On Determinants And Consequences Of Firm's Holding Female Directors: Evidence From Australia

This research investigates the determinants and consequence of firms holding female directors using data of publicly listed Australian firms.Understanding the determinants of female directors' existence and its implications is extremely crucial since it affects firms' corporate governance,performance and,consequently,shareholders' wealth.Moreover,female directors' existence has even wider consequences for equity investors in the areas of cost of capital and the trust of investors,customers,employees,and other stakeholders in the community.Therefore,this study is organized into three different research essays:(i)female directors' existence and product market competition(PMC);(ii)female directors' existence across firm's life cycle;and(iii)female directors' existence and cost of capital.Essay One investigates the association between PMC and female directors' existence.This study included all the Australian listed companies in the primary list of samples from 2001 to 2015.This research explored that competition determines the firm's female directors' presence suggests once the competition is low,then the firm's female directors' presence will be high,which supports the quiet life hypothesis.One possible explanation can be that low-competitive firms with higher market share might tend to comply with the corporate governance regulations as board gender diversity is one of them.Findings also reveal that low competition influence firms to have at least one female director in the audit committee.Moreover,competition has a positive and significant association with the firms' female directors service tenure,which indicates that the lower the competition higher will be the firm's female directors' service tenure or service experience.This research obtains evidence that low competition influences the firm's female directors' existence based on their expertise instead as a token.In Essay Two,I have explored the relationship between female directors' existence and the firm's life cycle.This study included the Australian listed companies in the primary list of samples from 2001 to 2015.The findings of this research revealed gender diversity varies across a firm's life cycle stages which mean that at the growth and mature stage of the cycle,firms are appointing female directors contrasted to the introduction and decline stage of the firm's life cycle.The additional test evidence that life cycle stages have no significant associations with the firm's having only one female director on the board.Finally,in Essay Three,I examine the association between female directors' existence and the cost of capital.This study included all the Australian listed companies in the primary list of samples from 2001 to 2015.The findings of this research revealed that female directors' existence could provide a signal of good quality corporate governance;therefore,diversified board monitoring might reduce the agency risk for shareholders and increases the financial reporting quality,which results in a lower cost of capital.Moreover,firms with female directors have more board and independent members.The return on assets shows significant inverse relation with the cost of capital for the firms that have woman directors on board.This research obtains evidence that woman directors committee membership and long service tenure lower the firm's cost of capital.