Gender diversity on the board of directors and its impact on the Palestinian financial performance of the firm

This study aims to examine the impact of gender  diversity  in  the  Board  of Directors  (BOD)  on  the  firm  performance—return  of  assets  (ROA)  and  return  of equity  (ROE)—using  a  sample  of  Palestinian  non-financial  companies  for  the  period 2008–2015.  Gender diversity was measured as a  percentage  of  women  in  the  BOD, and  dummy  variable  for  the  existence  of  at  least  one  woman  in  the  BOD.  The study employed method of two-stage least squares  (2SLS)  to  address  endogeneity  issues in  the  relationship  between  gender  diversity  and  company  performance.  The findings show that women still exist modestly in  the  BOD,  women  exist  more  in  the  BOD of  industrial  firms  than  in  the  BOD  of  service  firms.  Furthermore, firms with at  least one  woman  in  the  BOD  have  a  large  debt  ratio,  independence  of  BOD,  better  ROA performance,  less  size,  and  no  difference  in  BOD  size.  The results of  2sls  show  that gender  diversity  has  a  positive  and  statistically  significant  impact  on  firm performance.