The study aims to examine how gender diversity in corporate governance, particularly in board composition and leadership roles, affects cash holding policies in Tunisian financial firms. It seeks to bridge gaps in existing literature by focusing on an emerging market context, characterized by unique regulatory and corporate governance structures.
The analysis is based on a sample of 24 Tunisian financial firms cover a 15-year period (2008–2022). Financial data were sourced from the Tunis Stock Exchange, while governance data were extracted from activity reports. A dynamic panel regression model, employing the Arellano–Bond estimator, was used to capture the relationship between cash holding and gender diversity variables, alongside control variables such as firm size, leverage and performance.
Lagged cash holding significantly predicts current cash levels, supporting the persistence of liquidity management practices in financial firms. The proportion of independent female directors negatively impacts cash holding, suggesting a governance-driven focus on resource optimization over liquidity hoarding. Other gender diversity measures, including female representation as CEOs, institutional directors or board chairs, do not significantly influence cash levels. The results underline the evolving but constrained influence of gender diversity in shaping financial policies in the Tunisian financial sector.
The findings encourage Tunisian firms to enhance female participation on boards, particularly as independent directors, to improve governance and financial efficiency. Policymakers could consider legislative measures or incentives to promote gender diversity in corporate leadership, aligning with broader goals of financial stability and sustainable economic growth.
Promoting gender diversity in corporate governance not only improves financial decision-making but also reflects broader societal shifts toward inclusivity and equality. By integrating more women into leadership roles, Tunisian firms can set benchmarks for progressive corporate practices in the region.
This study contributes to the limited body of research on gender diversity and cash holding in emerging markets, offering empirical evidence from Tunisia's financial sector. It highlights the critical role of independent female directors in enhancing governance and optimizing liquidity management, challenging traditional assumptions about gender and risk aversion.
