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CEO gender and risk aversion: Further evidence using the composition of firm’s cash

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  • Sah, Nilesh B.
  • Adhikari, Hari P.
  • Krolikowski, Marcin W.
  • Malm, James
  • Nguyen, Thanh T.

Abstract

Recent studies suggest that the conventional measure of cash holdings used to capture managerial risk-aversion may be inadequate. Using a new measure of physical cash, which adequately captures managerial risk-aversion, we deduce that female CEOs exhibit risk-aversion not only by maintaining higher physical cash levels but also by adopting risk-reducing policies. These risk-averse policies may be detrimental for some shareholders (despite evidence that female executives reduce agency conflicts) and they may impact the demand for female CEOs in the CEO labor markets. Our results are robust and lend support to the contention that female risk-aversion exists even beyond the “glass-ceiling”.

Suggested Citation

  • Sah, Nilesh B. & Adhikari, Hari P. & Krolikowski, Marcin W. & Malm, James & Nguyen, Thanh T., 2022. "CEO gender and risk aversion: Further evidence using the composition of firm’s cash," Journal of Behavioral and Experimental Finance, Elsevier, vol. 33(C).
    • Handle: RePEc:eee:beexfi:v:33:y:2022:i:c:s2214635021001398
    DOI: 10.1016/j.jbef.2021.100595
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    Cited by:

    1. Safiullah, Md & Akhter, Tanzina & Saona, Paolo & Azad, Md. Abul Kalam, 2022. "Gender diversity on corporate boards, firm performance, and risk-taking: New evidence from Spain," Journal of Behavioral and Experimental Finance, Elsevier, vol. 35(C).
    2. Feng, Zhi-Yuan & Wang, Chou-Wen & Lu, Yu-Hong, 2022. "The impact of climatic disaster on corporate investment policy," Journal of Multinational Financial Management, Elsevier, vol. 66(C).
    3. Huang, Xiaohong & Kabir, Rezaul & Thijssen, Maximiliaan Willem Pierre, 2024. "Powerful female CEOs and the capital structure of firms," Journal of Behavioral and Experimental Finance, Elsevier, vol. 41(C).
    4. Frii, Peter & O’nions, Elizabeth & Sofla, Amin & Stålnacke, Oscar, 2023. "CEO gender and the probability that firms go public," Finance Research Letters, Elsevier, vol. 53(C).
    5. Yaghoubi, Mona, 2024. "Executive characteristics as moderators: Exploring the impact of geopolitical risk on capital structure decisions," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    More about this item

    Keywords

    Behavioral finance; CEO gender; Risk-aversion; Physical cash; CEO labor market;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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