THE ROLE OF KUWAITI WOMEN IN BOARDROOMS: THE IMPLICATION ON CAPITAL STRUCTURE

Abstract

ABSTRACT The implication of gender diversity has recently been given more attention, and this study aims to provide an empirical review and extend the existing literature on the impact of gender diversity, particularly the presence of Kuwaiti women in corporate boardrooms, on capital structure. We used a sample of 70 non-financial Kuwaiti firms over the period 2010-2020 in order to analyse the impact of gender diversity on the capital structure. Our findings reveal that, in Kuwait, women occupy a limited number of leadership positions in corporations, and their career progression is significantly slower than that of their male counterparts. This disparity may contribute to a higher unemployment rate among women. Moreover, the results of OLS, Fixed-effects models and Random-effects (GLS) confirmed our proposed hypothesis that the proportion of female directors on its board (GD) displays a negative and statistically significant coefficient. This suggests that boards with a higher percentage of female directors tend to use less leverage. Moreover, we have used four variables to measure the gender diversity, mainly the proportion of female directors on its board, Blau Index, Shannon Index, and a dummy variable that equals one if the board has at least one female director and zero otherwise. Interestingly, the results of all variables consistently support the findings that gender-diverse board of directors is negatively associated with leverage utilization, plying that more gender-diverse boards may lead firms to use less leverage. Keywords Gender diversity, Capital Structure, Kuwait, Women in Boardrooms, Corporate Governance.