Board gender diversity and ownership structure: Are they substitutes or complementary? Evidence from Palestine

This study investigates the interaction between ownership structures and female representation on the boards of directors in firms in Palestine, an emerging country with a very unstable political and economic setting. Using substitution and complementary hypotheses, the researchers examined a sample of 252 firm-year observations listed on the Palestine Exchange (PEX) for the period from 2013 to 2021. Both the baseline and robustness test findings show that the ownership structure appears to be inversely associated with board gender diversity (BGD), lending support to the hypothesis that gender diversity and ownership structure can be substituted for one another. These findings support the substitution hypothesis that when a small number of investors own a substantial proportion of shares in firms, allowing them to directly or indirectly exercise control and provide oversight of these firms’ management teams, it will be less necessary to rely on the monitoring role of the board (including women representation) to force managers to comply with their mandates, as those few blockholders can do so on their own.