CEO Characteristics on Cash Holdings & Overinvestment: Evidence from Indonesian Firms

The purpose of this research is to analyze the in luence of CEO characteristic towards irms’ cash holdings and over-investment of free cash low. This research uses multiple regression on panel data of a sample of 24 companies listed in index LQ45 for the period from 2013 to 2017 with 61 female CEOs and 59 male CEOs in the sample. This research is using CEO gender as independent variable; cash holdings and over-investment of free cash low as dependent variable. Other CEO characteristic such as age, education, tenure, irm size, market-to-book ratio, leverage, cash low, capex, networking capital, dividend, free cash low, managerial and state ownership as control variable. The research inds a positive signi icant in luence between female CEOs, cash holdings and over-investment. The results also show that female CEOs are having a higher level of cash holdings and resulted in lower level of over-investment problems. Female CEO also can mitigate the agency problem in the irm. The UET theory is used to support the indings in which CEO characteristic can in luence the company,s performance and inancial decision. UET literature focuses on executive demographic to explain corporate investment decision while this paper extends the application of the UET in the area of accounting.