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Female government officials and corporate cash holdings

Author

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  • Jiang, Tianqi
  • Shen, Yi
  • He, Yali
  • Wang, Zhao

Abstract

We examine the impact of the presence of female officials in the local government on cash holdings for firms in China. Compared to local governments without female officials, we find that those with female officials can reduce corporate cash holdings. The evidence shows that firms reduce cash holdings due to lower local policy uncertainty and level of corruption. Our results are robust to controlling for firm characteristics, using fixed effect regressions and alternative measures of cash holdings, and excluding centrally administrated cities. The relation between female government officials and corporate cash holdings is more pronounced for firms with higher managerial gender diversity and more investment opportunities. Further analysis indicates that female officials have a positive effect on the value of cash to shareholders. Overall, our results suggest that gender composition in local government officials has a non-negligible effect on corporate financial policies.

Suggested Citation

  • Jiang, Tianqi & Shen, Yi & He, Yali & Wang, Zhao, 2024. "Female government officials and corporate cash holdings," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:pacfin:v:84:y:2024:i:c:s0927538x24000258
    DOI: 10.1016/j.pacfin.2024.102274
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    More about this item

    Keywords

    Corporate cash holdings; Female government officials; Value of cash; Leadership style; Economic policy uncertainty;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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