scholarly journals The Effect of Board Diversity on Firm Performance: Evidence from Chinese L isted Companies

2020 ◽  
Vol 13 (1) ◽  
pp. 9-33
Author(s):  
Waqas Bin Khidmat ◽  
Muhammad Ayub Khan ◽  
Hashmat Ullah
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Gender Diversity ◽  
Diversity Education ◽  
Method Of Moment ◽  
Fixed Effects Model ◽  
Foreign National ◽  
Board Diversity ◽  
Listed Firms ◽  
The Impact

Drawing on the upper echelon’s theory and the resource-based theory, the purpose of the study is to examine the impact of board diversity on the Chinese A-listed firm’s performance. The data were collected from A-listed companies registered in Shanghai SSE 180 and the Shenzhen 100 from the period 2007 to 2016. Since some of the companies got listed after 2007, our data is unbalanced. Both fixed effects model and a more robust dynamic panel generalised method of moment estimation are applied to cater the endogeneity problem. After controlling for several firms and board characteristics, we found gender diversity, education diversity and foreign national diversity measured through Blau index have a positive and significant effect on the Chinese A-listed firm performance for both the accounting and market measures. The age diversity and independence diversity seem not to be an essential determinant of firm performance in Chinese A-listed firms. The results supported the efficient monitoring hypothesis and managerial networking theory, which suggests that the director’s diversity reduces the managerial entrenchment on the one hand, while, through networking, increases the resources of the firms on the other side.

scholarly journals The Impact of Audit Committee Characteristics on Corporate Biodiversity Disclosure: An Analysis of Japanese Firms

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Shahid Amin ◽  
Jawad Iqbal ◽  
Muhammad Abdul Majid Makki
Keyword(s):  
Fixed Effects ◽  
Audit Committee ◽  
Gender Diversity ◽  
Panel Regression ◽  
Fixed Effects Model ◽  
Listed Firms ◽  
Japanese Firms ◽  
Financial Expertise ◽  
The Impact ◽  
The Relationship

The objective of the study is to examine the impact of audit committee (AC) characteristics on corporate biodiversity disclosure by using the data of Japanese listed firms. For this purpose, the empirical data has been collected from corporate reports. The study develops hypotheses about the relationship between corporate biodiversity disclosure and AC characteristics such as size, independence, gender diversity, independent chair, frequency of meetings, and financial expertise.  We use panel regression (fixed effects model) to test the proposed hypotheses. The empirical results depict that the AC size, gender diversity, AC meetings, and financial expertise significantly impact corporate biodiversity disclosure. However, the AC independence and independence of the chair are not significant. The findings of this study may help regulators, policymakers, investors, shareholders, and managers in assessing and monitoring the corporate biodiversity disclosure in light of AC characteristics.

Product diversification, business structure, and firm performance in Taiwanese property and liability insurance sector

2017 ◽  
Vol 18 (5) ◽  
pp. 486-499 ◽  
Author(s):  
Chen-Ying Lee
Keyword(s):  
Firm Performance ◽  
Financial Services ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Product Diversification ◽  
Least Squares Regression ◽  
Fixed Effects Model ◽  
Content Type ◽  
The Impact ◽  
Business Structure

Purpose The purpose of this study is to analyze product diversification, business structure and insurer performance with a comprehensive look at the property-liability (P/L) insurance operations. Design/methodology/approach Using a panel data, this study employs an ordinary least squares regression model, fixed effects model and random effects model to examine the impact of product diversification and business structure on the performance of P/L insurers. The study assesses insurer performance using both risk-adjusted return on assets and risk-adjusted return on equity. Findings The study finds that product diversification is significantly negatively related to the performance of P/L insurers. The results are consistent with the diversification discount theory. The empirical results reveal that business lines have significant impacts on firm performance, particularly on the lines of fire and marine insurances. Furthermore, the interaction between product diversification and firm size implies that product diversification significantly increases the performance of large-sized insurance firms. Originality/value The study provides some valuable insights into the effects of diversification and business structure on the performance of P/L insurers in a developing country. The study’s findings suggest that management of P/L insurers should clarify their objectives and carefully assess the company’s resources when dealing with product diversification and business structure. The results have practical implications for the financial services industry in Taiwan.

Board diversity and corporate risk: evidence from China

2019 ◽  
Vol 20 (2) ◽  
pp. 280-293 ◽  
Author(s):  
Kalim Ullah Bhat ◽  
Yan Chen ◽  
Khalil Jebran ◽  
Zulfiqar Ali Memon
Keyword(s):  
Risk Taking ◽  
Fixed Effects ◽  
Fixed Effects Model ◽  
Board Diversity ◽  
Content Type ◽  
Listed Firms ◽  
Governance Practices ◽  
And Gender ◽  
Task Oriented ◽  
Corporate Risk

Purpose The purpose of this study shows how overall board diversity influences corporate risk-taking. Board diversity is quantified into task-oriented diversity (tenure and education) and relation-oriented diversity (age and gender). Further, this study tests whether the association of board diversity and corporate risk varies across state-owned firms (SOEs) and non-state-owned firms (NSOEs). Design/methodology/approach The authors used a sample of Chinese listed firms over the period 1999-2017. The results are estimated using the fixed-effects model. To deal with the endogeneity problem and single model bias, the authors use a dynamic model, i.e. two-step generalized method of moment’s model. Findings The results show that both task-oriented and relation-oriented diversity reduces corporate risk. Further, the authors document that overall board diversity reduces risk-taking across different types of firms, that is, SOEs and NSOEs. These results are consistent after controlling for endogeneity problems. Practical implications The results provide implications for enhancing corporate governance practices by considering overall board diversity as an important factor influencing corporate decisions. The findings suggest that policymakers and shareholders should consider different diversity attributes important for the composition of a board, which can enhance board outcomes. Originality/value Most of the prior studies considered only one dimension of diversity, and therefore, have overlooked the overall board diversity. Unlike prior studies, this study considers four board diversity attributes – age, gender, tenure and education, and further tests their association with corporate risk. Further, this study also examines the effect of overall diversity on corporate risk in SOEs and NSOEs.

Audit committee effectiveness and family firms: impact on performance

2019 ◽  
Vol 58 (6) ◽  
pp. 1021-1034
Author(s):  
Jihad Al-Okaily ◽  
Salma Naueihed
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Audit Committee ◽  
Family Firms ◽  
Family Firm ◽  
Fixed Effects Model ◽  
Minority Shareholders ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to empirically examine the relationship between audit committee characteristics and firm performance, and whether family ownership and involvement moderate the latter relationship. Design/methodology/approach Following Anderson and Reeb (2003), this paper estimates a two-way fixed effects model. A sub-sample analysis is used by first examining the impact of audit committee effectiveness on firm performance only in non-family firms and then only in family firms. A fully interacted model was also analyzed in the robustness tests. Findings This paper finds that the audit committee characteristics of size, expertise and meeting frequency are positively and significantly related to non-family firm performance, while insignificantly related to family firm performance. Research limitations/implications The evidence reported in this paper may be of use for regulators and policy makers pondering corporate governance reforms, as well as for investors, managers and minority shareholders concerned with firm performance and valuation. Originality/value To the best of the authors’ knowledge, this is the first study of its kind to examine the moderating effect of family control and involvement on the relationship between firm performance and audit committee effectiveness in terms of size, expertise and meeting frequency.

scholarly journals Corporate governance mechanisms and firm performance: evidence from the emerging market following the revised CG code

2019 ◽  
Vol 20 (1) ◽  
pp. 158-174 ◽  
Author(s):  
Yan Wang ◽  
Kaleemullah Abbasi ◽  
Bola Babajide ◽  
Kemi C. Yekini
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Indicators ◽  
Fixed Effects ◽  
Emerging Market ◽  
Board Independence ◽  
Executive Directors ◽  
Board Diversity ◽  
Content Type ◽  
The Impact

Purpose This study aims to examine the extent to which board characteristics and ownership structure affect firm performance with specific focus on providing new empirical insights following the revised corporate governance (CG) code 2012. Design/methodology/approach This study uses a sample of non-financial firms listed on Pakistan Stock Exchange (PSX)-100 index for the years 2011-2014. Firm performance is measured by accounting-based performance indicators (ROA and ROE) and market-based performance indicators (Tobin’s Q and MTB). This study uses multivariate regression techniques including fixed effects model and two-stage least squares (2SLS). Findings The findings show that board diversity increases over the two periods (pre-2012 and post-2012), whereas there are cases that companies have not fully complied with the revised CG code 2012 in terms of board independence. In addition, the multiple regression results show that firm performance is negatively and significantly associated with institutional ownership. Nevertheless, the results show that board size, board independent, board diversity and board meetings do not have significant impact on firm performance. The findings are fairly consistent and robust across two periods (pre-2012 and post 2012) and a number of econometric models that sufficiently address the potential endogeneity problems. Originality/value To the best of the authors’ knowledge, this is the first empirical study which investigates the impact of the compliance and implementation of 2012 CG code on firm performance in Pakistan. This study is different from the most prior studies in that they use independent non-executive directors rather than conventional non-executive directors to measure board independence.

scholarly journals Internationalization and Firm Performance: Case of Manufacturing Enterprises in Ecuador

2021 ◽  
Vol 12 (1) ◽  
pp. 11
Author(s):  
Phan Anh Tu ◽  
Huynh Tuan Anh
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Business Environment ◽  
Regression Result ◽  
Random Effects Model ◽  
Enterprise Performance ◽  
Fixed Effects Model ◽  
Access To Finance ◽  
Manufacturing Enterprises ◽  
The Impact

This paper aims to investigate the impact of internationalization on manufacturing enterprise performance in Ecuador. Using a panel data of 90 enterprises in Ecuador over the year 2003, 2006, 2010, and 2017 collected by the Worldbank Enterprises Survey project, with the Random Effects Model (REM) and the Fixed Effects Model (FEM), the regression result shows that the degree of internationalization (DOI) has a non-linear impact on firm performance under the inverse S-shaped curve. Besides that, the factors related to the business environment, such as bribery, access to finance, and skilled laborers' barriers, also negatively impact these firms' performance. The study's implication provides not only for firms but also for policymakers to support Ecuador businesses in the process of internationalization.

Does the gender quota law affect bank performances? Evidence from Italy

2020 ◽  
Vol 20 (6) ◽  
pp. 1135-1158
Author(s):  
Romilda Mazzotta ◽  
Olga Ferraro
Keyword(s):  
Fixed Effects ◽  
Gender Diversity ◽  
Estimation Model ◽  
Board Diversity ◽  
Content Type ◽  
Female Directors ◽  
Negative Effect ◽  
And Gender ◽  
Gender Quota ◽  
The Impact

Purpose This study aims to examine the impact of an increasing board diversity on the performance of Italian listed banks for the period 2008–2014, taking into account the effects of the implementation of gender quota laws in Italy. The study also investigates the effects of this potential relationship during the crisis that Italy had to cope with since 2011, as well as the potential impact of female directors and their roles on bank boards. Design/methodology/approach To verify this relationship, the study uses a panel sample of 22 listed banks and applies fixed effects with the Driscoll-Kraay error. Considering the shareholders’ perspective, bank performance (BP) is measured by return on average equity. The robustness of results is verified through return on average assets, Tobin’s Q (a market measure from investors/stakeholders’ perspective) and an alternate estimation model, i.e. GMM. Findings The findings highlight a positive relationship between the performance accounting measures and gender diversity, a non-neutral impact of the presence of female directors on boards and a significant and negative effect on market measures. Research limitations/implications The results of the study, as far as accounting measures are concerned, support managerial and legislative efforts toward more gender-balanced boards and the appointment of female directors in executive or independent roles. As per market measures, the results suggest that the presence of women on boards should be considered advantageous in terms of value, so that the market can finally appreciate diverse bank boards. Originality/value First, previous studies did not provide exhaustive results to document the proposed relationship and did not examine this relationship during a financial crisis. Second, the role of female directors on boards is also taken into account. Third, the study highlighted that BP is a multi-dimensional construct, with accounting and market metrics being its distinct dimensions.

Types of director, board diversity and firm performance

2020 ◽  
Vol 20 (2) ◽  
pp. 324-342 ◽  
Author(s):  
Miguel A. Fernández-Temprano ◽  
Fernando Tejerina-Gaite
Keyword(s):  
Firm Performance ◽  
Gender Diversity ◽  
Performance Impact ◽  
Board Diversity ◽  
Content Type ◽  
Performance Effect ◽  
Negative Effect ◽  
And Performance ◽  
The One ◽  
The Impact

Purpose The purpose of this paper is to investigate the effect of board diversity on firm performance. Design/methodology/approach From different theories perspective and based on data collected about the composition of board of directors in Spanish non-financial firms, the paper determines statistically the relationship between board diversity and performance for the period 2005-2015. Findings The results reveal differences between inside and outside board members in terms of the performance impact of board diversity. Thus, while age diversity has a positive effect on firm performance in both, insider and outsider directors, nationality mix is associated with higher performance levels just in the case of insiders. In addition, educational diversity seems to have a negative effect on performance for supervisory directors. On the contrary, the authors do not find any evidence about a possible influence of gender diversity on performance. Research limitations/implications The authors are just taking some board’s attributes, but the concept of board diversity is a very wide one. In this regard, less traditional methodologies that do not rely on extant archival databases may be necessary to get a deeper understanding of the impact of boards on firm’s performance. Practical implications This study demonstrates that the claim of “one size fits all” often implicitly stated by regulators and advisors is misleading. Board’s attributes analysis over the boardroom as a whole turns out in too simplistic conclusions. This is particularly important for regulators: a rigorous analysis should be performed before including general recommendations about, for instance, the age or the board tenure in corporate governance codes. Social implications As diverse boards contribute to a greater social value, the paper analyses the performance consequences of demographic diversity. Originality/value The paper analyses the firm performance impact of diversity among insider directors, on the one hand, and outsider directors, on the other. Although there is a clear difference between the roles assigned to insider and outsider directors, to the authors’ knowledge, there has been no analysis of the firm performance effect of the diversity of each type of director using the same sample and methodology.

scholarly journals Boards of directors and firm performance: A study of non-financial listed firms on the Kuwait Stock Exchange

2021 ◽  
Vol 18 (2) ◽  
pp. 40-47
Author(s):  
Mejbel Al-Saidi
Keyword(s):  
Firm Performance ◽  
Boards Of Directors ◽  
Stock Exchange ◽  
Board Independence ◽  
New Governance ◽  
Board Size ◽  
Board Diversity ◽  
Listed Firms ◽  
Kuwait Stock Exchange ◽  
The Impact

Prior to 2017, there were no corporate governance rules in Kuwait. The previous rules were silent regarding boards of directors, shareholders’ rights, disclosure, and auditing. However, at the beginning of 2017, the Kuwaiti government introduced new governance rules and required all firms listed on the Kuwait Stock Exchange (KSE) to comply with these rules. This study examined the impact of boards of directors on firm performance following the implementation of these new rules using a sample of 89 non-financial listed firms from 2017 to 2019. The study used four board variables – namely, board size, board independence, family directors, and board diversity – and found that, based on Tobin’s results, board size, board independence, and board diversity significantly impact firm performance whereas the ROA results indicate that only family directors significantly impact firm performance

scholarly journals Corporate board diversity and firm performance: Evidence from Nigeria

2012 ◽  
Vol 9 (2) ◽  
pp. 216-226 ◽  
Author(s):  
Augustine Ujunwa ◽  
Ifeoma Nwakoby ◽  
Charles Ogechukwu Ugbam
Keyword(s):  
Firm Performance ◽  
Gender Diversity ◽  
Resource Dependency ◽  
Least Square ◽  
Dependency Theory ◽  
Corporate Board ◽  
Board Diversity ◽  
Policy Makers ◽  
Least Square Regression ◽  
The Impact

This paper investigates the impact of corporate board diversity on the financial performance of Nigerian quoted firms using a panel data of 122 quoted Nigerian firms. The aspects of board diversity studied comprise board nationality, board gender and board ethnicity. The Fixed Effect Generalised Least Square Regression is used to examine the impact of board diversity on firm performance for the period: 1991-2008. The results show that gender diversity was negatively linked with firm performance, while board nationality and board ethnicity were positive in predicting firm performance. The study provides insights for practitioners and policy makers on the need to view the board as a strategic resource in line with the resource dependency theory instead of viewing the board solely from agency theory perspective.

Sign in / Sign up

Export Citation Format

Share Document