Cash is Queen: Female CEOs’ propensity to hoard cash

Nilesh B. Sah

Journal of Behavioral and Experimental Finance, 2021, vol. 29, issue C

Abstract: Recent research makes contradictory claims regarding why female CEOs eschew riskier policies. Benchmarking risk aversion by how much cash is accumulated and managed, we find strong evidence of greater female risk aversion above the glass ceiling. Using propensity-score matching and difference-in-differences around CEO transitions to account for possible endogeneity, we find that female CEOs hold more cash, reverse cash deficits faster, and are more likely to use excess cash to increase dividends, but not investment. We also find that, in the presence of high cash holdings, female CEOs are able to generate significantly higher Return on Assets (ROA) suggesting that risk aversion on the part of female CEOs does not hurt financial performance but rather enhances it.

Keywords: Cash holdings; Speed of adjustment; Excess cash; CEO gender; Risk aversion; Financial performance (search for similar items in EconPapers)
JEL-codes: G30 G32 G35 J16 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:29:y:2021:i:c:s2214635020303397

DOI: 10.1016/j.jbef.2020.100412

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