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Managing Bank Liquidity Hoarding during Uncertain Times: The Role of Board Gender Diversity

Author

Listed:
  • Denis DAVYDOV

    (Hanken School of Economics)

  • Tatiana GARANINA

    (University of Vaasa)

  • Laurent WEILL

    (LaRGE Research Center, Université de Strasbourg)

Abstract

This paper examines the effect of executive board gender diversity on the relationship between economic policy uncertainty (EPU) and bank liquidity hoarding (LH). We focus on the Russian banking sector, which, relative to most of the world, has a high share of women on bank executive boards. Using the news-based EPU index developed by Baker, Bloom, and Davis (2016) and LH measures proposed by Berger, Guedhami, Kim, and Li (2022), we exploit a unique dataset from the Russian banking sector. While higher economic policy uncertainty tends to increase liquidity hoarding, we find this effect diminishes as gender diversity of the board increases. We attribute this finding to the moderating influence of gender diversity on stability and overreaction in decision-making. These results argue for policies to promote gender diversity of bank boards as a means of limiting detrimental effects of economic policy uncertainty.

Suggested Citation

  • Denis DAVYDOV & Tatiana GARANINA & Laurent WEILL, 2022. "Managing Bank Liquidity Hoarding during Uncertain Times: The Role of Board Gender Diversity," Working Papers of LaRGE Research Center 2022-08, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2022-08
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    More about this item

    Keywords

    Liquidity hoarding; Bank boards; Gender diversity; Economic policy uncertainty.;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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