The Impact of Board Gender Diversity on Accounting Conservatism and the Cost of Debt: An Empirical Study on An Emerging Economy

The current research aims to examine the effect of board gender diversity on the accounting conservatism and cost of debt in Egypt. It investigates the association between female directors and both accounting conservatism and cost of debt. It was hypothesized that the representation of women in board rooms significantly influence the accounting conservatism and financing cost. A sample of 81 Egyptian listed non-financial firms was used, and data were collected from their annual financial reports during 2014-2023 to be analyzed. Regression analysis was carried out to test the hypotheses. The results show that board gender diversity has a positive significant effect on accounting conservatism, but it will be negative in case of increasing the female representation to reach more than 17%. On the other side, there is a negative effect on cost of debt when the representation of female in board of directors increased more than 25%. This study presents evidence of the impact of board gender diversity on accounting conservatism and debt cost. There is no study - to the best of our knowledge - that has yet examined the association between female representation in board rooms and both accounting conservatism and cost of debt in Egypt for a recent period. Egyptian firms were recommended to increase the number of females in boards to reduce the cost of debt.
The current research aims to examine the effect of board gender diversity on the accounting conservatism and cost of debt in Egypt. It investigates the association between female directors and both accounting conservatism and cost of debt. It was hypothesized that the representation of women in board rooms significantly influence the accounting conservatism and financing cost. A sample of 81 Egyptian listed non-financial firms was used, and data were collected from their annual financial reports during 2014-2023 to be analyzed. Regression analysis was carried out to test the hypotheses. The results show that board gender diversity has a positive significant effect on accounting conservatism, but it will be negative in case of increasing the female representation to reach more than 17%. On the other side, there is a negative effect on cost of debt when the representation of female in board of directors increased more than 25%. This study presents evidence of the impact of board gender diversity on accounting conservatism and debt cost. There is no study - to the best of our knowledge - that has yet examined the association between female representation in board rooms and both accounting conservatism and cost of debt in Egypt for a recent period. Egyptian firms were recommended to increase the number of females in boards to reduce the cost of debt.