Jakman

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Vol. 7 No. 4 (2026): September

Articles

Understanding Creditor Risk: Do Women on Boards Indirectly Escalate the Cost of Debt Through Tax Planning?

I Irwanto Handojo O Oktavia Oktavia
02 September 2026 Vol. 7 No. 4 (2026): September https://doi.org/10.35912/jakman.v7.n4.p257-275.2026
Abstract
02 Sep 2026

Purpose: This study investigates the direct effect of board gender diversity on the cost of debt, and its indirect effect mediated through corporate tax avoidance, during a macroeconomic crisis.
Research Methodology: Utilizing purposive sampling, a balanced panel of 60 manufacturing firms listed on the Indonesia Stock Exchange (180 firm-year observations) from 2021 to 2023 was analyzed using robust Common Effect panel regressions in Stata 18.
Results: The direct effect of board gender diversity on borrowing costs is highly insignificant. However, corporate tax avoidance has a significant positive direct effect on the cost of debt. The indirect pathway is positive and marginally significant, demonstrating that gender-diverse boards increase tax-planning intensity, which creditors subsequently penalize.
Conclusions: Board gender composition does not directly influence creditors. Rather, its effect is fully transmitted through strategic tax choices. During economic shocks, survival-driven cash conservation via tax planning is processed as a negative signal of opacity and audit risk by risk-averse relationship banks, driving up borrowing costs.
Limitations: The study is restricted to Indonesian manufacturing firms during the abnormal COVID-19 shock, with data availability constrained by incomplete corporate interest and debt disclosures.
Contributions: This research provides vital policy insights for the Financial Services Authority (Otoritas Jasa Keuangan-OJK) and commercial banks, showing that boardroom gender diversification mandates must be carefully balanced against strategic financial transparency demands in relationship-based emerging credit markets.

Keywords: Board Gender Diversity Cost of Debt Emerging Markets Indonesia Tax Avoidance
How to Cite
“
Handojo, I., & Oktavia, O. (2026). Understanding Creditor Risk: Do Women on Boards Indirectly Escalate the Cost of Debt Through Tax Planning?. Jurnal Akuntansi, Keuangan, Dan Manajemen, 7(4), 257–275. https://doi.org/10.35912/jakman.v7.n4.p257-275.2026
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