Page 24 - SUSTAINABILITY ISSUES & COVID-19

3.1 Table

Table 2
Regression Result
Model 1 Model 2
Var
Coef. Prob. Coef. Prob.
FCFO -14,812 0,023 -50,762 0,004
CH 0,063 0,441
FCFO*CH 3,805 0,028
SIZE 0,284 0,456 -0,068 0,4945
LEV 0,279 0,000*** 0,351 0,000***
ROA 1,530 0,000*** 1,111 0,000***
GRW 0,113 0,006*** 0,099 0,026**
R-square 0,0787 0,0533
Prob> F 0,0000 0,0000

4. RESULT AND ANALYSIS

The first research model tests hypothesis the female CFO have a positive effect on firm value. The results showed that
female CFO had a negative effect on firm value so H1a was rejected. Several studies have shown women’s representation
in the board of directors can worsen company performance such as Martinez, Oms, and Sempere (2016). Khlif and
Achek (2017), Huang and Kisgen (2013), Fairlie and Robb (2009).

The position of female CFOs in the company may not affect investors’ assessments of the company, but with the
characteristics of women who tend to be more careful, avoid risk and competition, focus more on social issues and
ethical issues, higher audit costs can reduce company performance which in turn considered to not provide the returns
and financial performance that investors expect.

The second research model tests the hypothesis that the higher the level of cash holding will weaken the effect of
female CFOs on firm value. The results showed that female CFOs had a negative effect on company value and the
higher level cash holding weakened the negative effect, those hypothesis 2 is also rejected. Previous research found
that high cash holding levels increase company liquidity, increase distribution to shareholders in the form of dividends
(Doan and Datta, 2020), protect potential risks in the future (Zeng and Wang, 2015), and reduce the risk of failure in
times of crisis (Palvia, Vahamaa , and Vahamaa, 2015).

5. CONCLUSION

This study aims to determine the effect of female CFO on firm value by moderation cash holding. One of the factors that
influence company performance is the characteristics and policies established by company management. The Finance
Director is a strategic position in charge of formulating strategies, making policies, and managing all matters related to
the company’s financial aspects. One of the points in managing a company’s finances is the cash holding level which in
previous studies could be influenced by the Director’s gender.

The results of the study concluded that in non-financial companies listed on the Indonesia Stock Exchange, female
CFO has a negative effect on firm value because the tendency to be more cautious and less competent might reduce
company performance and reduce investor investment returns, but moderation in cash holding weakens that negative
relationships. Becuse female CFO tend to have higher cash holding thereby increasing liquidity, dividend distribution,
and stronger survival potential in crisis periode.

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