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Digital archive of theses discussed at the University of Pisa


Thesis etd-03012022-124731

Thesis type
Tesi di dottorato di ricerca
Thesis title
Academic discipline
Course of study
tutor Prof. Liberatore, Giovanni
  • cash holdings
  • corporate governance
  • gender diversity
  • risk-taking
  • women directors.
Graduation session start date
Release date
In recent years, academics and governments have demonstrated an increasing interest in the role of women within organizations. This growing concern stems from the awareness that women have been historically under-represented in high-paying roles (García Lara et al., 2017). In the United States, 90% of new CEOs are promoted or taken on by line roles, and 100% of them are men (McKinsey, 2017). Worldwide data confirms this trend as only 4.6% of the largest companies are run by female CEOs (Forbes, 2021).
Cognitive psychology and behavioral economics literature have long acknowledged that men and women differ in behavior, attitudes, and preferences. Men and women diverge in information processing, conservatism, overconfidence, and risk tolerance (e.g., Croson and Gneezy, 2009). Given these differences and their potential implications for decision-making, the issue of gender diversity has begun to receive increasing attention in corporate finance and accounting literature over the past decade. Understanding whether and how women affect corporate dynamics and contribute differently resources from their male counterpart is still open in academic literature. However, the literature on gender diversity in the field of accounting and finance lack to consider the participation of women throughout the company and other positions of power held by women. The study of these elements might help to explain business phenomena and enrich the findings on the influence of women in top management positions.
Given the above considerations, the current dissertation aims to fill the gap in the literature by investigating different perspectives of gender diversity. Using various theoretical frameworks, this dissertation is structured as a collection of three papers and answers the following research questions: I) what is the state of art on gender diversity at the top of firm hierarchy?; II) does female pervasiveness affect firm risk-taking?; III) do women in powerful positions affect firm cash holdings?.
In order to answer these research questions, Chapter 1 holistically reviews academic literature on gender-diverse firms with the aim of identify the key topics of study and the current dynamics of the field. I combine bibliometric analysis and systematic review methods to analyze the state of art on this topic. I investigate 428 articles from the Scopus database to explore existing research on women in powerful positions between 2010 and 2021. The most influential articles and authors are established based on their publications and citations. Based on my findings, I develop most crucial frameworks for the literature in this field and the main research questions, in order to better comprehend the current roles of women at the top of firm hierarchies. Finally, I evaluate recent developments, highlight the limitations with regards to literature in this area, and identify trends in an attempt to identify promising topics for future researchers to investigate.
In the study presented in Chapter 1, I make the following contributions. First, to the best of the author’s knowledge, this study is the first to combine a systematic review method and a bibliometric analysis in the analysis of the existing literature on female participation in the top hierarchies of firms. I extend prior studies by investigating a greater pool of firm roles in order to provide a more comprehensive understanding of the state of art on this topic.
Second, I cluster the most relevant publications to establish streams of research and determine how gender diversity literature has evolved over time. The first cluster  female behavioral traits and firm outcomes  considers articles investigating how women’s personal traits might influence their decision-making processes when they enter the upper echelons. The second cluster  female directors and sustainability  specifically investigates whether the women on the board of directors influence corporate social responsibility (CSR) and environmental, social, and governance (ESG) disclosure. The third cluster  glass ceiling and glass cliff phenomena for women in the top of firm hierarchy  primarily investigates the conditions required for women to access a leadership career. Specifically, this cluster links the other two clusters as it contains articles investigating women in high corporate positions as well as articles on companies’ performance. The third contribution of this paper is achieved through the synthesizing of worldwide literature on gender diversity, highlighting areas that inform new paths for future scholars.
Drawing on tokenism and critical mass theories, Chapter 2 investigates the effect of female pervasiveness on the risk-taking of UK-listed firms. Female pervasiveness is proxied by the gender pay gap, which measures the difference in pay between men and women within a firm. The wider the gap, the less is female pervasiveness. My findings show that female pervasiveness reduces the firm’s overall risk-taking. These results are robust with several additional tests providing insights into gender pay gap effects. Consistent with tokenism theory, my findings provide novel evidence of the relevance of gender distribution within the firm to support the current policymakers efforts to improve gender equality.
This study makes several contributions to the existing literature. First, my findings add to gender literature by exploring the extent to which female participation at all corporate levels influences firms risk-taking. Prior studies investigated the relationship between gender diversity and firm risk-taking by focusing exclusively on female participation on corporate boards and showed diverse findings (Sila et al., 2016; Van Vo et al., 2020). I employed gender pay differential as a proxy of women’s participation (pervasiveness) at all levels in the hierarchy in firms and arrived at novel findings on how gender diversity is related to firm risk-taking. Further, I provide evidence that controlling for gender differences in the overall corporate positions is relevant to explaining the economic consequences of women being in leadership roles.
Second, my empirical evidence expands upon the findings from prior studies on the role of female CEOs/CFOs as influencers of corporate policies (Huang and Kisgen, 2013) by showing how the gender distribution in the firms can affect the development of high-risk policies by the firm. This study is connected to, but notably distinct from, the work of Faccio et al. (2016), who highlighted the risk-averseness of female CEOs. This research goes further along this line by investigating the effect of aggregate rather than individual gender-based differences on firm outcomes. Particularly, I explored the relationship between firm-wide female participation and firm risk-taking and provided empirical evidence of the relevance of the overall gender distribution of the employees.
Finally, this study is focused on UK firms, which pay more attention to corporate governance (García Lara et al., 2017). The business environment in the United Kingdom has become particularly interesting after the Equality Act, 2010, which requires companies to disclose their GPG publicly, was enforced in 2017. The UK is the primary mandator of disclosure of GPG at all levels in firms (Brown, 2019). To the best of my knowledge, no other study in the accounting and finance literature has investigated the effects of female pervasiveness—using GPG as its measure—on firm risk-taking.
Finally, Chapter 3 uses a large sample to compare the cash holdings of private UK firms from 2017 to 2019 in order to offer insights into whether and how women in powerful positions influence corporate cash holdings. Evidence from prior studies suggests that firms hold cash for precautionary reasons or for agency reasons. These traditional perspectives are combined with managerial discretion theory, revealing that managers’ personal characteristics influence corporate policies. However, existing scholarly literature on gender diversity only focuses on listed firms. This study provides evidence to demonstrate that women in powerful positions positively affect the cash holdings of private firms.
This research contributes to the existing literature in three distinct areas and my results hold valuable implications for policy-makers and practitioners. To the best of the author’ knowledge, despite the unquestionable importance of decisions pertaining to cash holdings, no prior studies examine the links between women and cash holdings, with the exception of Adhikari (2018) and Atif et al. (2019). However, Adhikari (2018) finds a positive association between female executives and cash holdings, while Atif et al. (2019) find a negative association between female directors and cash holdings. Nevertheless, the findings of these studies are limited to listed firms within the US. In this paper, I consider gender diversity in top corporate positions by measuring the individual’s power to affect firm cash holdings, which might explain why prior studies have reported mixed results.
Second, this study investigates gender diversity in privately-held firms and sheds light on the factors influencing cash holdings. My findings add to scholarly research exploring listed firms (García Lara et al., 2017). I extend the current body of literature on gender diversity by offering evidence to show that women in powerful positions affect corporate cash holdings. This research contributes to the increasing amount of research linking gender-based differences to corporate policies (Adhikari et al., 2019). I combine managers’ characteristics with traditional theories on economics, shedding light on the reasoning behind decisions made with regard to cash holdings. This research adds to and enhances emerging discussions on the value of gender diversity in the top echelons, offering insights for regulators observing gender diversity as a key method of governance.