Female Board Representation and Firm Financial Performance in Private Firms: Evidence From the Belgian Manufacturing Sector

Abstract

This paper investigates the impact of Female Board Representation (FBR) on Firm Financial Performance (FFP) in Belgian manufacturing firms, focusing on differences between private and public firms. I aim to determine whether FBR influences FFP and whether the same mechanisms apply to private and public firms. Using an unbalanced panel dataset of 300 firms (i.e. 150 private and 150 public) from 2014-2021, I analyse the effect of FBR on Return on Equity (RoE). My findings indicate that FBR does not have a statistically significant direct impact on FFP in either firm type. However, firm size was found to moderate this relationship in both corporate structures, failing to provide evidence in favour of the notion that mechanisms in private firms may differ. Yet, the lack of a statistically significant relationship in the FBR-FFP relationship for both governance types still puts into question the applicability of standard economic theorems such as Agency Theory (AT). The findings highlight the need for context-aware research to ensure reliable insights to policymakers and practitioners alike.