Gender diversity, cash holdings and the role of the institutional environment: empirical evidence in Europe

Rocca, Maurizio La; Rocca, Tiziana La; Staglianò, Raffaele; Vecellio, Pino; Montalto, Fabiola

doi:10.1080/00036846.2019.1566687

Cited by 23 publications

(28 citation statements)

References 66 publications

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“…La Rocca et al (2019) argue that women leaders hold more cash in anticipation of unexpected events such as natural disasters and liquidity risk. These motives demonstrate that women are generally risk-averse (Barber and Odean, 2001;Bliss and Potter, 2002) and less confident in making strategic decisions (Dowling and Aribi, 2013) compared to their male counterparts.…”

Section: Female Executives and Company Cash Holdingsmentioning

confidence: 99%

“…Vairavan and Zhang (2020) further noted that as the appointed female directors are more likely to be younger than male directors, the augmented female representation on board might result in a less experienced director who has a propensity for higher risk aversion. Therefore, female directors are positively associated with a higher level of corporate cash holdings in anticipation of potential risks in the future (La Rocca et al, 2019;Adhikari, 2018;Vieru, 2015;Zeng and Wang, 2015).…”

Section: Female Executives and Company Cash Holdingsmentioning

confidence: 99%

“…Previous studies have suggested that the presence of women in an organization's executive positions (La Rocca et al, 2019;Zeng and Wang, 2015) and CEO tenure are two of the CEO characteristics (Pan et al, 2016;Lim and Lee, 2019) that significantly influence a firm's investment decisions, as reflected by the level of corporate cash holdings. However, precise signs of the relationship among these three concepts are somehow inconsistent, either indicating a positive or negative association.…”

Section: Research Modelmentioning

confidence: 99%

“…A positive link between female executives and cash holdings arises if female executives display reluctance to assume any risks related to company cash policies. This circumstance is interpreted by Adhikari (2018) and La Rocca et al (2019) as female executives are more likely to hold more cash compared to their male counterparts because of the precautionary motives of unexpected financing. Correspondingly, Zeng and Wang (2015) argue that firms with female CEOs are more likely to hold more cash on the grounds of precaution because they are less concerned about the opportunity cost that could be generated by the available cash.…”

Section: Introductionmentioning

confidence: 99%

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Do female executives and CEO tenure matter for corporate cash holdings? Insight from a Southeast Asian country

Suherman

Usman

Mahfirah

et al. 2021

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Purpose This paper aims to investigate the relationship between female executives, chief executive officer (CEO) tenure and corporate cash holdings in the context of the developing Southeast Asian capital market (Indonesia). Design/methodology/approach The sample was screened from 231 publicly listed companies in the Indonesian Stock Exchange. The period of observation was 2011–2017. Two measures were applied for corporate cash holdings: the ratio of cash and cash equivalent to total assets and cash and cash equivalent to net assets. Three surrogate indicators were used for female executives: female CEO, the proportion of female members in the board of management and the number of female members in the board of management. CEO tenure is the length of time a CEO has been a member of the board of management. This study uses panel data regression analysis, including the fixed effect model with clustered standard errors. Findings The empirical evidence indicates that female executives and CEO tenure are positively and negatively associated with corporate cash holdings, respectively, and both are significantly related. Additional analysis using lagged independent variables remains consistent with the main analysis, suggesting that corporate cash holding becomes higher as a female presence in the board of management increases. Research limitations/implications Empirical tests set in Indonesia suggest that female executives are more conservative and risk-averse, thereby holding more cash with a precautionary motive. The findings also imply that CEOs with long tenure focus on long-term performance such as increasing research and development investments or capital expenditure, thus holding less cash. Accordingly, policymakers and regulators should promote diversity issues proportionally and advance to the board level. Originality/value This study contributes to the field of executive and CEO studies by enriching the empirical findings in related topics. In addition, to the best of the authors’ knowledge, this is one of the first studies applying two measures of cash holdings in the setting of a developing Southeast Asian capital market (Indonesia).

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Section: Female Executives and Company Cash Holdingsmentioning

confidence: 99%

Section: Female Executives and Company Cash Holdingsmentioning

confidence: 99%

Section: Research Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Do female executives and CEO tenure matter for corporate cash holdings? Insight from a Southeast Asian country

Suherman

Usman

Mahfirah

et al. 2021

View full text Add to dashboard Cite

show abstract

“…The increasing number of females in the top corporate spheres signifies the value of female leadership. Female leaders are known for their low overconfidence, opportunistic behavior and distaste for excessive risk-taking (Bernasek and Shwiff, 2001; Peni, 2014; Abou-el-sood, 2018; Adhikari et al , 2019; La Rocca et al , 2019; Ullah et al , 2019). Female leadership is associated with heightened firm performance (Adams and Ferreira, 2009), superior FRQ (Peni and Vähämaa, 2010), decreased agency conflict (Jurkus et al , 2011) and increased informativeness of stock prices (Gul et al , 2011).…”

Section: Introductionmentioning

confidence: 99%

Female CEOs and investment efficiency: evidence from an emerging economy

Ullah

Majeed

Fang

et al. 2020

PAR

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Purpose This study aims to investigate how the presence of female CEOs (FCEOs) affects investment efficiency in emerging economy, where female participation in business activities is limited. Design/methodology/approach This paper investigates the impact of CEO gender on investment efficiency by using investment efficiency measures proposed by Biddle et al. (2009), Chen et al. (2011) and Chen et al. (2013). Findings The findings suggest that FCEOs are associated with high level of investment efficiency. FCEOs improve corporate governance, streamline management and reduce inefficient investment decisions. In addition, FCEOs focus more on curbing underinvestment than overinvestment when making investment decisions. Furthermore, high financial reporting quality (FRQ) strengthens the effect of FCEOs on investment efficiency. The results suggest that FCEOs do not ameliorate the investment efficiency of state-owned enterprises. Originality/value This study enhances our understanding of the effects of FCEOs on corporate investment decisions in a male-dominated society. Efficient use of resources is vital from corporate and societal perspectives. Emerging economies are characterized by the unstable political and economic environment and low participation of females in decision-making. Hence, these economies require efficient utilization of resources. This study also sheds light on the role of FCEOs in curtailing underinvestment in emerging economies. It proves that FRQ is important in emerging economies because it strengthens the governance role of FCEOs.

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Board gender diversity and corporate social irresponsibility in a dominant owner context

Fleitas‐Castillo,

Peña‐Martel,

Pérez‐Alemán

et al. 2024

Corp Soc Responsibility Env

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The growing prominence of women directors has increased interest in their role in firms' social performance. However, knowledge of what impact female directors might have on corporate social irresponsibility (CSI) remains virtually non‐existent. This study aims to fill this gap. Using a sample of 107 Spanish listed non‐financial companies from the OSIRIS database (Bureau Van Dijk) for the period 2014–2022, together with alternative regression methods to account for endogeneity (2SLS, propensity scoring matching and generalised method of moments), our results show an inverted U‐shaped relationship between female directors and CSI. This supports arguments that dominant owners might appoint a small number of female directors symbolically to create a ‘halo effect’ or to enhance their public image and thus reinforce their entrenchment and divert attention away from CSI episodes. However, the appointment of a critical mass of female directors does evidence dominant owner commitment to move away from irresponsible corporate practices, since the presence of a larger number of female directors encourages the firm's ethical behaviour and increases the costs of penalising CSI episodes in the face of the firm's hypocritical behaviour. This study contributes to the emerging literature on CSI by complementing the knowledge gained from studies on ethical behaviour in a concentrated ownership setting. However, the study is not without limitations, especially in terms of the difficulty of measuring CSI episodes since, despite the work of the media, some socially irresponsible practices may remain hidden.

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Gender diversity, cash holdings and the role of the institutional environment: empirical evidence in Europe

Cited by 23 publications

References 66 publications

Do female executives and CEO tenure matter for corporate cash holdings? Insight from a Southeast Asian country

Do female executives and CEO tenure matter for corporate cash holdings? Insight from a Southeast Asian country

Female CEOs and investment efficiency: evidence from an emerging economy

Board gender diversity and corporate social irresponsibility in a dominant owner context

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