Abstract
This study examines the influence of gender diverse board on borrowing cost. Moreover, the study also explores the moderating effects of family ownership and Environmental, Social and Governance (ESG) disclosure on this relationship. This study used 4056 firm-year observations of non-financial firms listed on UK stock exchange over the period 2015 – 2022. To test the hypotheses, we applied ordinary least squares regression analysis and further employed generalized method of moments estimation and two stage least squares analysis to check the robustness of the results. Using insight from the agency theory, we found that due to beneficial effects of female directors, the board gender diversity is negatively related to the firm’s borrowing cost. Moreover, socioemotional factors and the firm’s legacy further reduce borrowing costs in family-owned firms. Finally, ESG disclosures act as a positive signal to lenders regarding the firm’s risk, resulting in lower borrowing costs. The study provides novel evidence of the influence of gender-diverse boards, family ownership, and ESG disclosures on borrowing costs in the context of a developed economy.