Gender Difference Of Executives And Accounting Conservatism

Whether in China or other countries, with the popularization of the concept of men and women being equal, female managers are getting more and more recognition. Breaking the bondage of traditional ideas and achieving real respect as men is not an easy thing. Thus, women are likely to make several times effort to get achievements and cherish their work immensely. During the process of management, the natural physiological difference between female and male results in great bias of female mangers in personality, way of thinking and ways to deal with problems compared with men. Cautious and conservative psychological norm makes female managers often choose the low degree of risk of financial decision-making and investment decisions, and in order to maintain the position and reputation, female managers also prefer not to choose overconfidence of investment projects.We can see that, in the face of the complicated situation of market economy, female managers are more likely to implement the conservatism principle. Choosing the female managers will undoubtedly reduce the possibility of enterprise encounter risk. On the other hand, in the field of corporate governance, the characteristics of the modern joint-stock enterprise are the separation of ownership and management, in order to maintain their own interests, the owner often alert whether the managers implement irrational behavior to avoid affecting the performance of the company. In this paper, we adopt the combination of theoretical research and empirical research method, review literature widely about the keywords of female managers, accounting conservatism, overconfidence and corporate performance, and select the corresponding measurement variables, propose the research hypothesis and use the empirical model to execute a further analysis. Our sample based on 7312 observations of Shanghai and Shenzhen A-share listed companies during the 2007-2015.With a simple screening of EXCEL, we use STATA to test research hypothesis.We draw the following conclusions:(1)The existence of the female executives will affect the accounting conservatism, and positively related with conservatism. Using Basu(1997) model to examine the existence of the accounting conservatism of tested sample firms, and testing the relationship between female managers and accounting conservatism, we find that the existence of the female executives will indeed increase the degree of confirmation "bad news".(2)Female executive significantly affects both of the conditional and unconditional conservatism positively. This paper adopt the C-SCORE to measure condition conservatism and the ACC to measure unconditional conservatism. We test the relationship between female executives and the two conservatism respectively, and find that the existence of the female managers has positive influence on the two kinds of accounting conservatism. Maybe because of the conservative psychological characteristics and risk aversion attitude when choosing financial decision-making and investment projects, female managers prefer to avoid the projects of large uncertainty.(3)Manager overconfidence is negatively related with accounting conservatism, and the existence of male executives will strengthen the negative relationship. This paper adopts three variables to measure manager overconfidence, the net purchase(Purchase), excessive investment(Over-Invest) and capital spending(CAPEX). We examine the relationship between each of these three variables and the two kinds of accounting conservatism, and find that accounting conservatism is negatively related with manager overconfidence. By adding variable MALE, we further find that male managers can strengthen the relationship between the accounting conservatism and managers overconfidence. It also explains the men have overconfidence. Because of the difference between men and women on overconfidence, female managers prefer to choose conservative accounting policy.(4)The existence of the female managers affects corporate performance, and there was a positive relation between the two. This paper choose three variable measure corporate performance, the total assets of yields ROA, ROE and TQ, to test whether the existence of the female managers have influence on corporate performance respectively. We find that accounting conservatism will enhance the relationship. Therefore, the gender diversity indeed is able to optimize the structure of management, improve corporate performance, and promote the further development of enterprises.This paper provide useful advice to women's career development. Enterprises should understand the advantage of women. Combining the men's courage and women's delicate will play vital role in the enterprise operation process.