CEO gender and corporate cash holdings. Are female CEOs more conservative?

Abstract

In this paper, we empirically investigate how CEO gender affects corporate cash holdings and the over-investment of free cash flow among Chinese listed firms. Thereby, we utilize a sample of 468 listed firms with female CEOs and a matched sample of firms with male CEOs during 2007–2011. We then make a distinction between listed SOEs and non-SOEs in China. The empirical results show that female CEOs are associated with a higher level of corporate cash holdings, especially in Chinese listed non-SOEs. Compared with their male counterparts, female CEOs are more concerned with the precautionary motive of cash, while they care less about the opportunity cost of cash. Besides, we find that female CEOs moderate the over-investment problem of free cash flow, again indicating that they are more conservative than their male counterparts. The latter finding is more pronounced in the subsample of Chinese listed SOEs.