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How female directors help firms to attain optimal cash holdings

Tosun, Onur Kemal ORCID:, El Kalak, Izidin ORCID: and Hudson, Robert 2022. How female directors help firms to attain optimal cash holdings. International Review of Financial Analysis 80 , pp. 1-20. 10.1016/j.irfa.2022.102034

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Is female board representation helpful for firms attaining optimal cash holdings? We address this question using data on 1163 US-listed firms for 2000‐–2017. We show that if there are more female directors on firm boards, ceteris paribus, there is no effect on excess cash holdings implying that female directors are not inclined to be particularly cautious or optimistic. However, in the presence of overly confident CEOs, having more female directors on the board counteracts the tendency of such CEOs to reduce cash holding below an optimal level. Thus, female board representation enhances corporate decision making through effective monitoring and thus, taming CEOs' biased behavior.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Publisher: Elsevier
ISSN: 1057-5219
Date of First Compliant Deposit: 8 February 2022
Date of Acceptance: 9 January 2022
Last Modified: 06 May 2023 02:29

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