Does Board Gender Diversity Affect Corporate Cash Holdings

This paper examines whether board gender diversity affects corporate cash holdings using S&P 1,500 index firms in the US for the period 2006–2015. We document a significantly negative relationship between board gender diversity and cash holdings. We also find a strong negative effect of female independent directors consistent with monitoring function. Moreover, in accordance with the critical mass theory, we find a negative effect of female directors’ presence and voice on cash holdings. Our findings are robust to alternative econometric specifications, alternative measures of cash holdings and corporate governance, difference-in-differences, propensity score matching, and two-stage least squares. This study offers useful insights to the current global debate on gender diversity and its implications for firms.