This study aims to investigate the impact of gender diversity in top management (TM) on the risk-taking behavior, efficiency and financial stability of Islamic rural banks (IRBs).
This study analyzed unbalanced panel data comprising 1,429 bank-year observations from 164 IRBs operating in Indonesia between 2016 and 2024. The sample was divided into three groups: the full sample, the large total assets (TA) sample and the small TA sample. The analysis used the two-step system generalized method of moments estimator.
Overall, gender diversity in TM shows favorable effects on the risk-taking behavior, efficiency and financial stability of IRBs in Indonesia. Although the results are not consistent across the entire sample, greater female representation in TM tends to be associated with lower risk-taking, higher efficiency and stronger financial stability. In addition, female leadership in TM is linked to higher liquidity risk, improved efficiency and enhanced financial stability.
The findings provide valuable insights for banking practitioners, particularly within Indonesia’s Islamic rural banking sector, on how gender diversity in TM can contribute to improved performance and long-term institutional sustainability.
This study simultaneously examines three important dimensions, that is, risk-taking behavior, efficiency and financial stability, each measured using operational indicators and explores their relationship with gender diversity in TM. To the best of the authors’ knowledge, this provides a novel empirical investigation in the context of Islamic rural banking.
