Please use this identifier to cite or link to this item: http://bura.brunel.ac.uk/handle/2438/30338
Title: Empowerment or Ornament? Gender Diversity's Impact on Cash Holdings Amid Quota Enforcement in an Emerging Market
Authors: El-Dyasty, MM
Elamer, A
Keywords: female directors;quota;cash holdings;corporate governance;emerging markets
Issue Date: 10-Dec-2024
Publisher: Emerald Publications
Citation: El-Dyasty, M.M. and Elamer, A. (2024) 'Empowerment or Ornament? Gender Diversity's Impact on Cash Holdings Amid Quota Enforcement in an Emerging Market', International Journal of Accounting and Information Management, 33 (1), pp. 187 - 212. doi: 10.1108/IJAIM-06-2024-0198.
Abstract: Purpose: This study examines the impact of female directors on cash holdings in Egyptian listed firms, particularly in light of Decree 123/2019, which mandates female board representation. This study aims to determine if female directors mitigate agency conflicts related to cash holdings and how these dynamics shift post-quota implementation. Design/methodology/approach: Using a panel fixed-effects model, the research analyzes 1,563 firm-year observations from 223 non-financial Egyptian firms listed on the EGX between 2014 and 2022. The robustness of the findings is tested through additional analyses using alternative proxies for cash holdings, different sample periods and a two-stage least squares approach to address endogeneity concerns. Findings: This study finds a significant negative association between female directors and cash holdings, suggesting that female board members may promote more conservative cash management practices. However, this relationship weakens post-quota implementation, becoming statistically insignificant. This implies that while quotas increase female representation, they do not necessarily enhance corporate governance effectiveness regarding cash management. The pre-quota positive link between female directors and excess cash holdings also becomes insignificant post-quota. Research limitations/implications: The study focuses on female directors’ impact on cash holdings, excluding potential effects on other board subcommittees or functions. It does not capture long-term benefits of increased female representation, which may emerge as the pool of qualified female directors grows. Future research should explore broader implications of gender diversity guidelines and other diversity dimensions across various corporate governance aspects and institutional contexts. Originality/value: This research provides empirical evidence from an emerging market context on the understudied impact of gender diversity on cash holdings. It critically evaluates the unintended consequences of mandatory gender quotas, highlighting the complexity of regulatory interventions in corporate governance. The study stresses the need for policymakers to address factors limiting the effectiveness of such quotas and to consider potential suboptimal outcomes when increasing female board representation without a corresponding increase in the supply of qualified female directors.
Description: Data availability statement: Data available on request from the authors.
URI: https://bura.brunel.ac.uk/handle/2438/30338
DOI: https://doi.org/10.1108/IJAIM-06-2024-0198
ISSN: 1018-368X
Other Identifiers: ORCiD: Mohamed M. El-Dyasty https://orcid.org/0000-0002-7695-1457
ORCiD: Ahmed Elamer https://orcid.org/0000-0002-9241-9081
Appears in Collections:Brunel Business School Research Papers

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