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<p>This study examines the non-financial sector of the Pakistan Stock Exchange (PSX) from 2009 to 2023 to assess the impact of female board representation on the stock price crash risk. The study employs fixed effects regression models with robust standard errors to address unobserved firm-specific factors and potential heteroskedasticity. It employs a comprehensive dataset of 1,900 firm-year observations sourced from annual reports and additional resources. The Down to Up Volatility and the negative coefficient of skewness serve as indicators for assessing the risk of a stock price crash. Both indicate a diminished probability of stock price crash risk when there is an increased presence of women on boards with foreign qualifications (BRDFQ) and local financial expertise (BRDFB). This study investigates the impact of family ownership on the relationship between female board representation and stock price crash risk. The results indicate that family ownership has a significant influence on this relationship. When family ownership increases, the positive effect of female directors with financial expertise and international qualifications on reducing crash risk becomes weaker, as shown by the positive interaction terms (FBFO and FQFO). These results add to the understanding of gender diversity and corporate governance in developing economies. The study suggests that women with strong financial and global skills can enhance financial stability and reduce the likelihood of market crashes in non-financial firms. However, family ownership limits this benefit. Overall, the findings offer valuable insights for investors, regulators, and company leaders in Pakistan on how board composition impacts firm-level risk.</p>

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Does ownership matter? family influence on the relationship between female board expertise and stock price crash risk in Pakistan

  • 期刊论文

  • 发表日期：

    2026年2月6日

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  • Sadaf Noreen,
  • Nousheen Tariq Bhutta,
  • Hamad Raza,
  • Ahsan Riaz,
  • Muhammad Nabi

摘要

This study examines the non-financial sector of the Pakistan Stock Exchange (PSX) from 2009 to 2023 to assess the impact of female board representation on the stock price crash risk. The study employs fixed effects regression models with robust standard errors to address unobserved firm-specific factors and potential heteroskedasticity. It employs a comprehensive dataset of 1,900 firm-year observations sourced from annual reports and additional resources. The Down to Up Volatility and the negative coefficient of skewness serve as indicators for assessing the risk of a stock price crash. Both indicate a diminished probability of stock price crash risk when there is an increased presence of women on boards with foreign qualifications (BRDFQ) and local financial expertise (BRDFB). This study investigates the impact of family ownership on the relationship between female board representation and stock price crash risk. The results indicate that family ownership has a significant influence on this relationship. When family ownership increases, the positive effect of female directors with financial expertise and international qualifications on reducing crash risk becomes weaker, as shown by the positive interaction terms (FBFO and FQFO). These results add to the understanding of gender diversity and corporate governance in developing economies. The study suggests that women with strong financial and global skills can enhance financial stability and reduce the likelihood of market crashes in non-financial firms. However, family ownership limits this benefit. Overall, the findings offer valuable insights for investors, regulators, and company leaders in Pakistan on how board composition impacts firm-level risk.