The relationship between female workforce participation and corporate bond credit ratings
-
Received August 20, 2020;Accepted October 26, 2020;Published October 30, 2020
- Author(s)
-
DOIhttp://dx.doi.org/10.21511/imfi.17(4).2020.04
-
Article InfoVolume 17 2020, Issue #4, pp. 33-43
- TO CITE АНОТАЦІЯ
- 610 Views
-
96 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The topic of gender diversity in the workforce has received an increasing amount of attention and even resulted in developing a new term, sheconomy, which describes an economy in which women are the main economic players. This study examines the relationship between female workforce participation and corporate bond credit ratings. Using an ordered logit regression model and a sample of listed companies on the Korea Exchange, the results show that the higher the number and proportion of women in the workforce (based on female directors and female employees), the higher the credit rating. However, for chaebol companies, where female directors’ positive role is limited by chaebol owners, a negative (–) moderating effect is observed in the relationship between female workforce participation and credit ratings. Besides, female directors who are members of the owner’s family and were appointed as a means of succession negatively affect a company’s value. The findings contribute to accounting and finance research on the relationship between governance and credit ratings in terms of gender diversity. Policy implications regarding the recent system changes in Korea, including introducing a gender quota system, can be derived from the study.
- Keywords
-
JEL Classification (Paper profile tab)G30, G38, M41
-
References24
-
Tables6
-
Figures0
-
- Table 1. Effect of female directors on corporate bond credit ratings (H1a)
- Table 2. Effect of female employees on corporate credit ratings (H1b)
- Table 3. Additional review of the effect of female employees on corporate credit ratings
- Table 4. Moderating effect of chaebol enterprises in the relationship between female directors and credit ratings (H2)
- Table 5. Differences in credit ratings based on the ratio of family relationships in firms with female directors
- Table 6. The moderating effects of family relationships on the relationship between female directors and credit ratings (chaebol vs. non-chaebol)
-
- Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291-309.
- Anderson, R. C., Mansi, S. A., & Reeb, D. M. (2004). Board characteristics, accounting report integrity, and the cost of debt. Journal of Accounting and Economics, 37(3), 315-342.
- Ashbaugh-Skaife, H., Collins, D. W., & LaFond, R. (2006). The effects of corporate governance on firms’ credit ratings. Journal of Accounting and Economics, 42(1-2), 203-243.
- Barua, A., Davidson, L. F., Rama, D. V., & Thiruvadi, S. (2010). CFO gender and accruals quality. Accounting Horizons, 24(1), 25-39.
- Bhojraj, S., & Sengupta, P. (2003). Effect of corporate governance on bond ratings and yields: The role of institutional investors and outside directors. Journal of Business, 76(3), 455-475.
- Carter, D. A., Simkins, B. J., & Simpson, W. G. (2003). Corporate Governance, Board Diversity, and Firm Value. Financial Review, 38(1), 33-53.
- Chang, J. J., & Shin, H. H. (2006). Governance system effectiveness following the crisis: The case of Korean business group headquarters. Corporate Governance: An International Review, 14(2), 85-97.
- Erhardt, N., Werbeland, J., & Shrader, C. (2003). Board of director diversity and firm financial performance. Corporate Governance: An International Review, 11(2), 102-111.
- Fahlenbrach, R. (2009). Founder-CEOs, investment decisions, and stock market performance. Journal of Financial and Quantitative Analysis, 44(2), 439-466.
- Francis, B., Hasan, I., Park, J. C., & Wu, Q. (2014). Gender differences in financial reporting decision-making: Evidence from accounting conservatism (Bank of Finland Research Discussion Papers).
- Francis, J., Nanda, D., & Olsson, P. (2008). Voluntary disclosure, earnings quality, and cost of capital. Journal of Accounting Research, 46(1), 53-99.
- Gul, F., Srinidhi, B., & Ng, A. C. (2011). Does board gender diversity improve the informativeness of stock prices? Journal of Accounting and Economics, 51(3), 314-338.
- Heminway, J. M. (2007). Sex, trust, and corporate boards. Hastings Women’s Law Journal, 18(2), 173.
- Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383-396.
- Kaplan, R. S., & Urwitz, G. (1979). Statistical models of bond ratings: A methodological inquiry. Journal of Business, 52(2), 231-261.
- Khanna, T., & Yafeh, Y. (2005). Business groups and risk sharing around the world. Journal of Business, 78(1), 301-340.
- La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1999). Corporate ownership around the world. Journal of Finance, 54(2), 471-518.
- Park, J. H., Sung, Y. D., & Jeong, M. G. (2010). The role of chaebol on CEO Turnover in Korean corporate governance. Journal of Strategic Management, 13(3), 89-119. (In Korean).
- Pinches, G. E., & Mingo, K. A. (1973). A multivariate analysis of industrial bond ratings. The Journal of Finance, 28(1), 1-18.
- Schulze, W. S., Lubatkin, M. H., & Dino, R. N. (2003). Exploring the agency consequences of ownership dispersion among the directors of private family firms. Academy of Management Journal, 46(2), 179-194.
- Sengupta, P. (1998). Corporate disclosure quality and the cost of debt. Accounting Review, 73(4), 459-474.
- Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610-1644.
- Villalonga, B., & Amit, R. (2006). How do family ownership, control and management affect firm value? Journal of Financial Economics, 80(2), 385-417.
- Wilson, N., & Altanlar, A. (2009). Director characteristics, gender balance and insolvency risk: an empirical study (Working paper). University of Leeds.
-
-
Conceptualization
Yujin Kim
-
Data curation
Yujin Kim
-
Formal Analysis
Yujin Kim
-
Investigation
Yujin Kim, Jiyeun Hong
-
Methodology
Yujin Kim
-
Project administration
Yujin Kim
-
Resources
Yujin Kim, Jiyeun Hong
-
Software
Yujin Kim, Jiyeun Hong
-
Supervision
Yujin Kim
-
Validation
Yujin Kim
-
Visualization
Yujin Kim
-
Writing – original draft
Yujin Kim
-
Writing – review & editing
Yujin Kim, Jiyeun Hong
-
Conceptualization
-
Gender diversity and organizational performance: a study of IT industries in Bangalore
Akanksha Khanna , Ashwini Y. , Jilsy Varghese doi: http://dx.doi.org/10.21511/im.13(3).2017.04Innovative Marketing Volume 13, 2017 Issue #3 pp. 33-41 Views: 1205 Downloads: 1043 TO CITE АНОТАЦІЯHumans are considered to be different from each other with their acumen and intelligence. The working condition in IT sector has changed over the past few decades. There has been a drastic increase in the number of female employees towards the development of IT sector over the past few years. Gender diversity is creating a wide range of awareness and helps understand the importance of gender identity. IT industry which is a dominant industry in India has reckoned gender diversity as a major tool to ensure it stands on criteria of being competent and innovative in the ever changing dynamic business environment. The main objective of this paper is to analyze the relationship between acceptance of gender diversity among the employees, diversity practices and programs adopted by the IT industries and barriers to the same.
-
Gender diversity and sustainability responsiveness: evidence from Nigerian fixed money deposit banks
Emmanuel Ozordi , Damilola Felix Eluyela , Uwalomwa Uwuigbe , Olubukola Ranti Uwuigbe , Chukwu Emmanuel Nwaze doi: http://dx.doi.org/10.21511/ppm.18(1).2020.11Problems and Perspectives in Management Volume 18, 2020 Issue #1 pp. 119-129 Views: 1092 Downloads: 151 TO CITE АНОТАЦІЯThis paper aims to explore the impact of gender diversity on firms’ sustainability responsiveness in ensuring collective drive toward achieving sustainable development goals (agenda) for Nigeria. This study explored female engagement from three major platforms, namely women as directors, management team leaders, and female workforce. The data used to conduct this study were derived from the annual reports of the sampled banks spanning through the period of 2013–2016. However, while data for this study were analyzed using EViews statistical tool, the sustainability reporting data were ascertained using the content analysis method. The outcome of this study depicts that female directors, female workforce, and women in the management team all had an adverse and positive association with sustainability reporting. However, this association was all insignificant. This further buttresses that gender diversity was not the major driving force behind the sustainability reporting of the sampled banks in Nigeria. This is because the sector is highly regulated. Hence, the study recommends that notwithstanding the outcome, in attaining the sustainable development goals (SDGs), there is a need to have more female representation on the strategic position of authority.
-
Credit ratings and firm value
Investment Management and Financial Innovations Volume 17, 2020 Issue #2 pp. 157-168 Views: 840 Downloads: 136 TO CITE АНОТАЦІЯA topic of relevance to financial managers is the relation between a credit rating and firm value (VL). The general aim of this paper is to elucidate this relation with a specific objective of helping C corp managers choose an optimal target rating (OTR). To achieve these goals, we use the Capital Structure Model (CSM) to compute a series of firm value (VL) outcomes matched to credit ratings. The maximum VL (max VL), among all VL outcomes, identifies OTR. This identification begins with the matching of credit spreads and ratings by Damodaran (2019) for three firm categories: small, large, and financial service (FS). Given these spreads, we can compute costs of borrowing with these costs needed to compute VL and other numerical outcomes. Besides costs of borrowing, our numerical outcomes are based on other key inputs including US $1,000,000 in before-tax cash flows, C corp tax rates, and a sustainable growth rate. Major findings that guide managers include the following. First, Moody’s A3 is the most common OTR. Second, growth firms generally require higher ranked OTRs. Third, compared to small and large firms, FS firms attain greater max VL values, higher optimal debt-to-firm value ratios (ODVs), and generally lower ranked OTRs. Fourth, relative to small firms, large firms gain less from growth even though they attain greater max VL outcomes. Fifth, only for FS firms can we find outcomes where operational cash flows are better spent on interest payments than retained internally for growth.