Are Female Executives Trailblazers or Maintainers? Evidence of Financial Policy by Chinese Companies

Abstract

We examined female executives and their impact on corporate financial policies including investment decisions, external financing, working capital management, and cost efficiency. We found that those female executives who are more risk averse invest less in expenditure investment decisions, engage in less external financing, aggregate less working capital, and exhibit greater cost efficiency. Furthermore, we identified whether or not female executives made corporate financial policies differently in high-growth and low-growth industries. We found that female executive emphasized restraint regarding expansion decisions in high-growth industries, but emphasized internal management in low-growth industries. Finally, we found that the conservative behavior of female executive is more beneficial to financial performance in low-growth industries. Our results are consistent with conservative trends of female executives.

Keywords: Executive gender; Risk Aversion; Financial policy; Industry Growth; Financial Performance