Regression analysis – impact of female directors on the cost of equity capital
| Variables | (1) | (2) | (3) | (4) | (5) | (6) | (7) |
|---|---|---|---|---|---|---|---|
| PEG | PEG | PEG | MPEG | MPEG | MPEG | VIF | |
| Intercept | 0.076*** | 0.080*** | 0.081*** | 0.140*** | 0.151*** | 0.148*** | |
| (12.186) | (14.006) | (14.355) | (24.387) | (28.599) | (28.348) | ||
| LNFEM | −0.004*** | −0.006*** | 1.96 | ||||
| (−2.831) | (−4.783) | ||||||
| FEMDUM | −0.005*** | −0.003** | 1.39 | ||||
| (−2.867) | (−2.373) | ||||||
| FEMPER | −0.011** | −0.019*** | 1.28 | ||||
| (−2.098) | (−3.872) | ||||||
| LNBOD | −0.007*** | −0.008*** | −0.009*** | −0.015*** | −0.02*** | −0.019*** | 1.52 |
| (−2.978) | (−4.031) | (−4.651) | (−7.111) | (−10.208) | (−10.166) | ||
| INDPER | −0.001 | −0.002 | −0.002 | 0.003 | 0.001 | 0.002 | 1.07 |
| (−0.44) | (−0.575) | (−0.595) | (0.891) | (0.364) | (0.669) | ||
| CEODUAL | 0.002** | 0.002** | 0.002** | −0.003*** | −0.003*** | −0.003*** | 1.03 |
| (2.003) | (2.026) | (2.00) | (−3.449) | (−3.406) | (−3.457) | ||
| LNMEET | 0.008*** | 0.008*** | 0.008*** | −0.001 | −0.001 | −0.001 | 1.05 |
| (5.209) | (5.18) | (5.206) | (−0.757) | (−0.822) | (−0.752) | ||
| BIG4 | −0.001 | −0.001 | −0.001 | 0.001 | 0.001 | 0.001 | 1.15 |
| (−0.514) | (−0.372) | (−0.535) | (0.762) | (0.676) | (0.74) | ||
| AUDOPIN | 0.006*** | 0.006*** | 0.006*** | −0.003*** | −0.003** | −0.003*** | 1.02 |
| (5.91) | (6.006) | (5.956) | (−2.808) | (−2.574) | (−2.746) | ||
| RESTATE | 0.005** | 0.005** | 0.005** | 0.009*** | 0.009*** | 0.009*** | 1.01 |
| (2.283) | (2.296) | (2.291) | (4.247) | (4.277) | (4.258) | ||
| LNSIZE | −0.001** | −0.001** | −0.001** | −0.001*** | −0.001*** | −0.001*** | 1.67 |
| (−2.195) | (−2.322) | (−2.368) | (−2.803) | (−3.563) | (−3.03) | ||
| LEVER | 0.032*** | 0.032*** | 0.032*** | 0.027*** | 0.027*** | 0.027*** | 1.13 |
| (10.742) | (10.711) | (10.726) | (9.581) | (9.523) | (9.555) | ||
| LOSS | 0.030*** | 0.030*** | 0.030*** | 0.019*** | 0.019*** | 0.019*** | 1.29 |
| (12.65) | (12.621) | (12.658) | (8.703) | (8.733) | (8.712) | ||
| ROA | −0.062*** | −0.062*** | −0.062*** | −0.040*** | −0.040*** | −0.040*** | 1.31 |
| (−15.558) | (−15.612) | (−15.578) | (−10.892) | (−10.961) | (−10.922) | ||
| SALEGR | −0.006** | −0.006** | −0.006** | 0.006** | 0.007*** | 0.006** | 1.08 |
| (−2.248) | (−2.213) | (−2.203) | (2.412) | (2.644) | (2.465) | ||
| BETA | 0.018*** | 0.018*** | 0.018*** | 0.017*** | 0.018*** | 0.017*** | 1.05 |
| (16.038) | (16.122) | (16.096) | (17.145) | (17.469) | (17.213) | ||
| Industry | Yes | Yes | Yes | Yes | Yes | Yes | |
| Year | Yes | Yes | Yes | Yes | Yes | Yes | |
| Observations | 8,224 | 8,224 | 8,224 | 8,224 | 8,224 | 8,224 | |
| Adj R2 | 14.22 | 14.21 | 14.23 | 11.36 | 11.14 | 11.23 |
| Variables | (1) | (2) | (3) | (4) | (5) | (6) | (7) |
|---|---|---|---|---|---|---|---|
| PEG | PEG | PEG | MPEG | MPEG | MPEG | VIF | |
| 0.076*** | 0.080*** | 0.081*** | 0.140*** | 0.151*** | 0.148*** | ||
| (12.186) | (14.006) | (14.355) | (24.387) | (28.599) | (28.348) | ||
| LNFEM | −0.004*** | −0.006*** | 1.96 | ||||
| (−2.831) | (−4.783) | ||||||
| FEMDUM | −0.005*** | −0.003** | 1.39 | ||||
| (−2.867) | (−2.373) | ||||||
| FEMPER | −0.011** | −0.019*** | 1.28 | ||||
| (−2.098) | (−3.872) | ||||||
| LNBOD | −0.007*** | −0.008*** | −0.009*** | −0.015*** | −0.02*** | −0.019*** | 1.52 |
| (−2.978) | (−4.031) | (−4.651) | (−7.111) | (−10.208) | (−10.166) | ||
| INDPER | −0.001 | −0.002 | −0.002 | 0.003 | 0.001 | 0.002 | 1.07 |
| (−0.44) | (−0.575) | (−0.595) | (0.891) | (0.364) | (0.669) | ||
| CEODUAL | 0.002** | 0.002** | 0.002** | −0.003*** | −0.003*** | −0.003*** | 1.03 |
| (2.003) | (2.026) | (2.00) | (−3.449) | (−3.406) | (−3.457) | ||
| LNMEET | 0.008*** | 0.008*** | 0.008*** | −0.001 | −0.001 | −0.001 | 1.05 |
| (5.209) | (5.18) | (5.206) | (−0.757) | (−0.822) | (−0.752) | ||
| BIG4 | −0.001 | −0.001 | −0.001 | 0.001 | 0.001 | 0.001 | 1.15 |
| (−0.514) | (−0.372) | (−0.535) | (0.762) | (0.676) | (0.74) | ||
| AUDOPIN | 0.006*** | 0.006*** | 0.006*** | −0.003*** | −0.003** | −0.003*** | 1.02 |
| (5.91) | (6.006) | (5.956) | (−2.808) | (−2.574) | (−2.746) | ||
| RESTATE | 0.005** | 0.005** | 0.005** | 0.009*** | 0.009*** | 0.009*** | 1.01 |
| (2.283) | (2.296) | (2.291) | (4.247) | (4.277) | (4.258) | ||
| LNSIZE | −0.001** | −0.001** | −0.001** | −0.001*** | −0.001*** | −0.001*** | 1.67 |
| (−2.195) | (−2.322) | (−2.368) | (−2.803) | (−3.563) | (−3.03) | ||
| LEVER | 0.032*** | 0.032*** | 0.032*** | 0.027*** | 0.027*** | 0.027*** | 1.13 |
| (10.742) | (10.711) | (10.726) | (9.581) | (9.523) | (9.555) | ||
| LOSS | 0.030*** | 0.030*** | 0.030*** | 0.019*** | 0.019*** | 0.019*** | 1.29 |
| (12.65) | (12.621) | (12.658) | (8.703) | (8.733) | (8.712) | ||
| ROA | −0.062*** | −0.062*** | −0.062*** | −0.040*** | −0.040*** | −0.040*** | 1.31 |
| (−15.558) | (−15.612) | (−15.578) | (−10.892) | (−10.961) | (−10.922) | ||
| SALEGR | −0.006** | −0.006** | −0.006** | 0.006** | 0.007*** | 0.006** | 1.08 |
| (−2.248) | (−2.213) | (−2.203) | (2.412) | (2.644) | (2.465) | ||
| BETA | 0.018*** | 0.018*** | 0.018*** | 0.017*** | 0.018*** | 0.017*** | 1.05 |
| (16.038) | (16.122) | (16.096) | (17.145) | (17.469) | (17.213) | ||
| Industry | Yes | Yes | Yes | Yes | Yes | Yes | |
| Year | Yes | Yes | Yes | Yes | Yes | Yes | |
| Observations | 8,224 | 8,224 | 8,224 | 8,224 | 8,224 | 8,224 | |
| Adj | 14.22 | 14.21 | 14.23 | 11.36 | 11.14 | 11.23 |
Note(s): This table reports regression results of the relation between the cost of equity capital and female directorship. The dependent variables are PEG and MPEG. ***, **, * Indicate statistical significance at the 1, 5 and 10 percent levels, respectively, based on a two-tailed test. t-statistics are in parentheses. Standard errors are two-way clustered by firm and year to correct for cross-sectional and time-series dependence. VIF stands for Variance Inflation Factor. See Appendix for variable definitions
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