Article: Investigation on leveraging effect of women directors on board to R&D investment and firms' financial performance in the context of developing countries: evidence from Indonesia Journal: Afro-Asian Journal of Finance and Accounting (AAJFA) 2020 Vol.10 No.4 pp.480 - 493 Abstract: This study examines the leveraging effect of gender diversity, specifically women directors on board (WDB), to the relationship between research and development (R&D) investment to the financial performance. Additionally, the study aims to deepen our understanding of the main behavioural driver of corporate financial performances in Indonesia, one of the fast developing countries within South East Asia. Data from 227 public companies listed in Indonesian stock exchange (IDX) are extracted from their 2015 annual reports and corporate websites. Tobin's Q is employed as the dependent variable, along with R&D investment and WDB as main testing variables. Using regression, the study finds that firms' with higher number of women directors on board and more focus on their R&D investment activities, will be able to generate higher financial performance than those firms with lower gender diversity and R&D investments. This paper contributes to literature on R&D investment in Indonesia, which is still limited, to the best of the authors' knowledge. The reported findings also uncover the main important finding of leveraging effect of number of WDB to the relationship between R&D investment and firms' financial performance in Indonesia. Inderscience Publishers - linking academia, business and industry through research

Title: Investigation on leveraging effect of women directors on board to R&D investment and firms' financial performance in the context of developing countries: evidence from Indonesia

Authors: Sita Deliyana Firmialy; Akbar Adhiutama

Addresses: School of Business and Management, Institut Teknologi Bandung, Indonesia ' School of Business and Management, Institut Teknologi Bandung, Indonesia

Abstract: This study examines the leveraging effect of gender diversity, specifically women directors on board (WDB), to the relationship between research and development (R&D) investment to the financial performance. Additionally, the study aims to deepen our understanding of the main behavioural driver of corporate financial performances in Indonesia, one of the fast developing countries within South East Asia. Data from 227 public companies listed in Indonesian stock exchange (IDX) are extracted from their 2015 annual reports and corporate websites. Tobin's Q is employed as the dependent variable, along with R&D investment and WDB as main testing variables. Using regression, the study finds that firms' with higher number of women directors on board and more focus on their R&D investment activities, will be able to generate higher financial performance than those firms with lower gender diversity and R&D investments. This paper contributes to literature on R&D investment in Indonesia, which is still limited, to the best of the authors' knowledge. The reported findings also uncover the main important finding of leveraging effect of number of WDB to the relationship between R&D investment and firms' financial performance in Indonesia.

Keywords: R&D investment; financial performance; women directors on board; WDB; moderating effect; developing countries; Indonesia.

DOI: 10.1504/AAJFA.2020.110494

Afro-Asian Journal of Finance and Accounting, 2020 Vol.10 No.4, pp.480 - 493

Received: 31 Aug 2017
Accepted: 21 Aug 2018
Published online: 22 Oct 2020 *

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Title: Investigation on leveraging effect of women directors on board to R&D investment and firms' financial performance in the context of developing countries: evidence from Indonesia

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