Does Gender Diversity Mitigate the Relationship Between Tax Avoidance and Cash Holdings?

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Abstract
This study investigates the moderating role of board gender diversity in the relationship between tax avoidance and corporate cash holdings in the Kingdom of Saudi Arabia (KSA), an emerging market in the Gulf Cooperation Council region. The analysis is based on a panel dataset of nonfinancial firms listed in KSA over the period 2020–2023. Fixed-effects regression models are employed to examine the proposed relationships, and robustness checks are conducted using alternative measures of cash holdings and lagged independent variables to mitigate endogeneity concerns. The results reveal a significant positive association between tax avoidance and corporate cash holdings, indicating that firms engaging in greater tax avoidance strategies tend to accumulate higher cash balances. Furthermore, board gender diversity is found to strengthen this relationship, suggesting that gender-diverse boards play an active role in influencing financial decision-making related to tax-driven cash retention.

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