Board gender diversity and US corporate bonds

Abstract

Purpose

The purpose of this paper is to examine the impact of board gender diversity on bond terms and bondholders’ returns.

Design/methodology/approach

The authors perform pooled OLS regression, simultaneous regressions and propensity score matching to a panel data set of bond data for 319 US firms from 2007 to 2014.

Findings

The authors find that firms with gender-diverse boards have lower yields, higher ratings, larger issue size and shorter maturity. They also find that bondholders require fewer returns from firms with gender-diverse boards. However, the effect is more pronounced when women, constitutes at least 29.67 percent of the board.

Originality/value

This analysis supplements the findings that board gender diversity is essential for bondholders. It shows that bondholders should look at board gender diversity as a criterion to invest because bonds issued by firms with gender-diverse board have less risk. For practitioners, this study shows that more women participation on boards leads to a reduction in borrowing costs.

Citation

Oyotode-Adebile, R.M. and Raja, Z.A. (2019), "Board gender diversity and US corporate bonds", International Journal of Managerial Finance, Vol. 15 No. 5, pp. 771-791. https://doi.org/10.1108/IJMF-10-2018-0290