Family Ownership, Women in Top Management and Risk Taking: Evidence from Indonesia

Abstract

Family firms were widely recognized to have substantial contribution to economy especially in emerging economies. However, some previous studies reveal that family firms tend to be conservative and unwilling to take more risks. We ex- tended the literature by investigating whether there was a difference in risk- taking behavior between family and non-family firms in the context of Indone- sia. Moreover, the presence of women in the top management also considered negatively correlated with risk-taking strategy. Therefore, this study empiri- cally examined the effects of family ownership and women in top management on risk-taking strategy of firms. Using data of 336 publicly traded firms in Indo- nesia over 2012-2016, this study confirmed the negative effect of family owner- ship and women in top management on corporate risk-taking. Family owner- ship and involvement as the CEO of the firms negatively associated with the level of risk taking. Moreover, our results reveal that the presence of women was matter more to decrease corporate risk-taking when they served in the board of directors rather than in the board of commissioners. Keywords: