The influence of female leadership on the cash holdings of listed companies in Vietnam

Abstract

This study examines the relationship between female leadership factors and the cash holdings of Vietnamese companies. The random effects regression model (REM) is used with panel data from the financial statements of 174 companies listed on the Ho Chi Minh Stock Exchange in the period 2013-2020. Besides control variables, factors related to female leadership including the female CEO, the percentage of women on the board of executives, the female chairman, the percentage of women on the board of directors, and duality are included in the research model with the expectation of having a positive effect on cash holdings. The estimation results show that companies with female executives hold more cash and maintain lower levels of financial leverage than companies with male executives. Female executives will increase profitability and reduce the risk to the company. The influence level of the female on the Board of Directors on the company's cash holdings depends on the characteristics of each company. Besides, the results also show that net working capital, cash flow, ROA, and dividend payment have a positive correlation with the cash holdings of the company. Listed companies should pay attention to two factors: the proportion of women on the Board of Directors and female executives in order to diversify gender in the leadership and improve the ability to decide on financial strategies.