Does board diversity affect the cost of debt financing? Empirical evidence from Turkey

What is it about?

This study aims to investigate the effects of board characteristics on the cost of debt for non-financial companies in Turkish capital markets. Using a sample of 211 non-financial companies listed on Borsa Istanbul (BIST), this study examines how board characteristics affects the cost of debt by employing panel data analysis over the period of 2016–2020. A system generalized method of moments (GMM) model is also applied to test the endogeneity issue. The findings show that the presence of female chairperson, and female directors on board reduces the cost of debt and the perceptions of default risk by fund providers, while board independence and board size do not have a significant impact on the cost of debt.

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