Is gender diversity good for the quality of accruals in Indonesia?
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DOIhttp://dx.doi.org/10.21511/ppm.20(1).2022.08
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Article InfoVolume 20 2022, Issue #1, pp. 80-92
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There is no regulation in emerging markets, i.e. Indonesia imposing the gender diversity quota. Therefore, based on the different characteristics and attributes between developed and emerging markets, this study aims to analyze the impact of the boardroom’s gender diversity on the quality of accruals, i.e. earnings in big Indonesian firms. This study used a sample of 100 big manufacturing firms in Indonesia. Moreover, this paper utilized a widely used proxy for the quality of earnings and the boardroom’s gender diversity. Data panel with fixed effect method was used to compute the quality of accruals while path analysis was utilized for hypotheses testing. Furthermore, the results showed evidence that the boardroom’s gender diversity indirectly influenced the quality of accruals through cash flow variability. However, the presence of female directors is not a significant inducement for managers to report better quality of earnings. The managerial implication of this study is that the boardroom’s gender diversity is good for the emerging markets since it supports better accounting accruals indirectly. Future studies should incorporate many industries and consider the potential of endogeneity, which has not been tackled in this paper.
- Keywords
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JEL Classification (Paper profile tab)G30, J16
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References41
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Tables8
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Figures1
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- Figure 1. Research framework
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- Table 1. Sample calculation
- Table 2. Descriptive statistics (non-dummy)
- Table 3. Descriptive statistics (dummy)
- Table 4. Goodness of fit
- Table 5. A direct effect of variables in equations (4), (5), and (6)
- Table 6. An indirect effect of BOARD1 on AQF through CFOVAR
- Table 7. A direct effect of variables in equations (9), (10), and (11) – sensitivity check
- Table 8. An indirect effect of BOARD2 on AQD through CFOVAR
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