The nexus between female directors and corporate cash holdings: Evidence from Indonesia

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In the last decade, gender diversity on boards or women in the boardroom has gained the attention of academics and practitioners. This paper aims to explore how women directors affect corporate cash holdings in Indonesia. This study utilizes data on Kompas 100 index firms for 2014–2021. A fixed-effect estimator is used to analyze data. The study reveals that female directors positively influence cash holdings. This finding remains robust when employing an alternative proxy for female directors and excluding observations during the COVID-19 period. Additionally, the findings indicate notable variations in cash holdings between companies with and without female directors. Regarding control variables, a firm’s cash holdings are negatively influenced by board size, leverage, company size, and net working capital. Firm profitability and growth opportunities positively influence cash holdings. This paper also documents that institutional ownership weakens the nexus between female directors and cash holding. The findings highlight that female directors hold higher amounts of cash because of their increased risk aversion. This study enriches the discussion on female directors and cash-holding levels in a developing country with a two-tiered board system.

Acknowledgments
This study is not funded by any funding agency.

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    • Table 1. Descriptive statistics
    • Table 2. Correlation matrix
    • Table 3. Baseline regression results
    • Table 4. Alternative measure of female directors
    • Table 5. Excluding observations during the COVID-19 period
    • Table 6. Independent sample t-test results
    • Table 7. The moderating effect of institutional ownership
    • Conceptualization
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani, Medo Maulianza, Nurul Sriminarti
    • Data curation
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani
    • Formal Analysis
      Bambang Sutrisno, Medo Maulianza, Nurul Sriminarti
    • Funding acquisition
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani, Medo Maulianza, Nurul Sriminarti
    • Methodology
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani
    • Resources
      Bambang Sutrisno, Medo Maulianza, Nurul Sriminarti
    • Software
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani
    • Validation
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani, Medo Maulianza, Nurul Sriminarti
    • Writing – original draft
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani, Medo Maulianza, Nurul Sriminarti
    • Writing – review & editing
      Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani
    • Investigation
      Jaharuddin Jaharuddin, Nur Asni Gani
    • Project administration
      Jaharuddin Jaharuddin, Nur Asni Gani
    • Visualization
      Jaharuddin Jaharuddin, Nur Asni Gani
    • Supervision
      Medo Maulianza, Nurul Sriminarti