Does the Critical Mass Assumption Change the Behavior of Female Board Members toward Dividend Payout?
Abstract
This article aims to investigate the association between gender board diversity and the dividend payout policy of the firms listed on the Pakistan stock exchange. The study uses critical mass theoretical assumptions to explain this relationship. The study uses a sample of 300 non-financial firms listed on the Pakistan stock exchange for six years (2015–2020). The study employs regression diagnostics tests to check for Heteroscedasticity, Multicollinearity, and Serial Correlation problems. The random effects regression model was chosen using a series of steps to analyze the associations among variables. The results conclude that one woman on the corporate board is positively associated with dividend payout, while a negative relationship has been examined in firms with more than one woman on their board. The inclusion of women on the corporate board is critical to the firms, and the policymakers are suggested to restructure the regulatory codes regarding gender board diversity in Pakistan. This paper focuses precisely on critical mass theoretical lenses to observe the association between gender board diversity and dividend payout. Concluding the significant influence of women on corporate boards, the theoretical foundation is justified.
Keywords: dividend payout, gender board diversity, corporate board, critical mass assumption.
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