Analysis of the Impact of Female Executives on Corporate Financial Leverage

This study examines the role of female executives in corporate financial leverage using data from all domestic companies in China from 2010 to 2021. The sample is carefully screened, and the fixed-effects model is employed for regression analysis. The results indicate that the proportion of female executives is negatively correlated with financial leverage, supporting the hypothesis that female executives have an inhibitory effect on corporate leverage. Further endogeneity tests and robustness checks confirm the robustness of the findings. Additionally, we conduct heterogeneity tests considering state-owned versus non-state-owned enterprises and small versus large enterprises. The results reveal that the negative correlation between the proportion of female executives and financial leverage is more pronounced in non-state-owned and large enterprises, while it is not significant in state-owned and small enterprises. These differences could be attributed to variations in corporate governance structures and decision-making processes. The findings of this research provide valuable policy implications for companies aiming to enhance their financial management and risk management practices. Recognizing the importance of female executives in shaping financial decisions, companies are encouraged to promote gender diversity in leadership positions and create an inclusive environment for talent selection and advancement. By understanding the impact of female executives on financial leverage, companies can make informed decisions and mitigate potential risks associated with aggressive financing behaviors.