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Board Gender Diversity and Corporate Cash Holdings

Aitzaz Ahsan Alias Sarang, Nicolas Aubert () and Xavier Hollandts

Finance, 2021, vol. 42, issue 1, 7-49

Abstract: This study investigates the relationship between board gender diversity and corporate cash holdings (i.e., liquidity risk) and excess cash holdings (i.e., agency risk). Using a sample of French firms listed on the SBF 120 index over the period 1998-2015, we find a significant positive relationship between board gender diversity and two measures of corporate cash holdings ? corporate cash ratio and industry-adjusted cash ratio ? and a negative relationship between board gender diversity and excess cash holdings. These results support the notion that feminized boards are associated with lower liquidity and agency risk, implying that women directors are more rigorous at monitoring, preventing managers from stockpiling cash beyond the optimal level. In relation to the Copé-Zimmermann gender quota law, the study provides significant intermediate results that are robust to alternate specifications and tests.

Keywords: cash holdings; women directors; gender quota; appetite for risk (search for similar items in EconPapers)
Date: 2021
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