The Moderating Role of Board Gender Diversity on the Nexus Between Corporate Liquidity and Dividend Policy: Evidence From Brics

Abstract

Corporate liquidity plays a crucial role in determining a firm’s ability to distribute dividends. Board gender diversity, as a key corporate governance mechanism, has the potential to enhance decision-making, reduce agency conflicts, and promote shareholder interests, which may in turn strengthen the relationship between liquidity and dividend payouts .This study investigates the moderating role of board gender diversity on the relationship between corporate liquidity and dividend policy in BRICS countries.. Drawing on agency theory, the research examines how internal corporate governance mechanisms, particularly gender diversity on boards, influence financial decisions in non-financial manufacturing firms. Using panel data from 2012 to 2023 for BRICS region, regression analysis is applied to test the proposed hypotheses. The findings reveal that corporate liquidity significantly affects dividend policy in some BRICS nations (positively in Russia and India, negatively in South Africa, China and Brazil), while board gender diversity exerts varying influences. Gender-diverse boards significantly moderate the relationship between liquidity and dividends in BRICS countries, either by enhancing or mitigating liquidity's effect. These results suggest that corporate liquidity and board composition interact differently across national contexts due to varying institutional, economic, and cultural settings. The study provides valuable insights for policymakers, corporate leaders, and investors by highlighting the importance of board structure and internal governance in shaping dividend decisions in emerging economies.