Nationality Diversity in Corporate Boards and Tax Avoidance: Evidence from Oman

Alshabibi, Badar; Pria, Shanmuga; Hussainey, Khaled

doi:10.3390/admsci12030111

Cited by 5 publications

(8 citation statements)

References 49 publications

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“…However, the result shows a negative impact between supervisory boards and the performance of accounting aspect as measured by ROA). This finding is consistent with a prior study by Alshabibi et al (2022), who found that a nationality diversity board will lead to lower effective tax rates.…”

Section: Performance Of Accounting Aspect Return On Assets (Roa)supporting

confidence: 93%

“…Therefore, they will supply comprehensive culture capital, skill sets, and informational resources. Alshabibi et al (2022) bear in mind that foreign director members are more effective and independent in overseeing management than domestic directors. According to Choi et al (2012), foreign directors are comparatively split from majority shareholders because they are not a portion of the conventional local cronyism of school relationship, kinship, and regionalism with the significant part of owners.…”

Section: Nationality Diversitymentioning

confidence: 99%

“…Previous relevant research has been conducted in various countries and corporate governance systems. First, Alshabibi et al (2022) investigated 1049 companies from 2009 and 2019 that were listed on the Muscat Stock Exchange. They find that the existence of a national diversity board will lead to lower effective tax rates.…”

Section: Nationality Diversitymentioning

confidence: 99%

“…In addition, supervisory board nationality diversity can hinder the achievement of current board members because of the periods needed by foreign directors to familiarize themselves with the newly discovered circumstances, such as culture, systems, and language (Mersland and Øystein Strøm, 2009), and it reduces the company performance. In addition, local directors are more likely cheaper and easier to attract, and they have more time and energy to attend board meetings (Alshabibi et al, 2022).…”

Section: Performance Of Accounting Aspect Return On Assets (Roa)mentioning

confidence: 99%

“…Previous papers have documented the importance of directors' nationality diversity for company outcomes. Non-local directors are associated with the company performance (Adams and Baker, 2021;Fernández-Temprano and Tejerina-Gaite, 2020;García-Meca et al, 2015), company value (Metwally, 2021), corporate social performance (Harjoto et al, 2019), quality of CSR disclosure (Khan et al, 2019), human proper reporting (Branco et al, 2021), tax avoidance (Alshabibi et al, 2022), firm profitability (Hamid, 2018), R&D spending (Asad et al, 2023), strategic change (Samara and Yousef, 2023), firm stability (Elnahass et al, 2023), investment decision (Mirza et al, 2020), corporate philanthropic behaviour (Kang et al, 2019), corporate sustainability performance (Zaid et al, 2020) and corporate social responsibility (Ibrahim and Hanefah, 2016).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Director's Nationality Diversity and Company Performance: The Evidence From Emerging Market

Zaitul,

Ilona,

Abd-Mutalib

et al. 2024

EKUITAS (Jurnal Ekonomi dan Keuangan)

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This study describes the diversity of directors' nationality from company attributes: company leverage, growth, size, age, and sub-sector. This study also analyses the association between directors' nationality diversity and the performance of Indonesia's listed companies using two measurements: ROA and ROS (accounting performance) and Stock return and Tobin’s Q (market performance). This study used 3,290 observations in 235 companies (from 2004 to 2017). As a result, the level of director nationality diversity varies based on the company size (large vs. small), company age (old vs. young), company growth (high vs. low), company leverage (high vs. low), company sub-sector (central vs. manufacturing vs. trading & service sub-sector). In addition, the diversity of the supervisory board nationality is negatively related to the ROA and Tobin’s Q and positively associated with stock return. The company breaks the negative effect of supervisory board nationality diversity by reducing the periods foreign directors need to familiarise themselves with newly discovered circumstances, such as culture, systems, and language. The company suggests increasing the supervisory board nationality diversity regarding the stock return as detailed theoretical and practical implications.

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Section: Performance Of Accounting Aspect Return On Assets (Roa)supporting

confidence: 93%

Section: Nationality Diversitymentioning

confidence: 99%

Section: Nationality Diversitymentioning

confidence: 99%

Section: Performance Of Accounting Aspect Return On Assets (Roa)mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Director's Nationality Diversity and Company Performance: The Evidence From Emerging Market

Zaitul,

Ilona,

Abd-Mutalib

et al. 2024

EKUITAS (Jurnal Ekonomi dan Keuangan)

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Diversity–performance nexus in an emerging economy: an investigation of family and non-family firms

Islam

Saha

Rahman

2023

IJOEM

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PurposeThe empirical study aims to examine the impact of board diversity with respect to gender and nationality on firm performance in an emerging economy. This research further splits the sample into family and non-family domains and investigates the diversity–performance nexus in isolation.Design/methodology/approachThe sample consists of 183 listed companies in Bangladesh over the period 2007 to 2017. This study employed the generalised method of moments (GMM) technique to address the possible endogeneity issue in the governance–performance connection. To underscore the strength of diversity, three distinctive assessment measures were used: percentage representation of females and foreign directors, the Blau index and the Shannon index.FindingsThe results for the full sample models reveal that board heterogeneity regarding both female and foreign directors positively and significantly influences firm performance as measured by return on assets (ROA). Further to this, female directors in family-owned businesses have a positive association with profitability, whereas foreign nationals demonstrate a significant positive association with performance in non-family firms. Additionally, at least three women directors are needed to make a positive difference in profitability; however, a sole director with foreign nationality is capable of demonstrating a similar impact on performance.Practical implicationsThe findings are significant for policymakers and organisations that advocate diversity on corporate boards of directors, and the minimum number of diverse board members needs to be considered depending on the identity to bring about a significant change in organisational outcome. Therefore, the findings of this study may be applied to other emerging economies with similar institutional characteristics.Originality/valueThis study reinforces the existing stock of knowledge on the impact of board diversity on the profitability of firms, especially in the context of an emerging economy – Bangladesh. Irrespective of the given backdrop, this study finds that both gender and nationality diversity in the case of Bangladesh is found to have a positive and significant effect on financial performance with respect to all the diversity metrics, i.e. the proportionate number of female and foreign directors on the boards, the Blau index and the Shannon index.

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Ethical governance and the board’s moderating role in Zakat avoidance effects on firm value in muslim nations

Kateb,

Ftouhi

2023

JFRC

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Purpose This paper aims to examine the impact of Zakat avoidance on firm value and investigates how board characteristics moderate this relationship within the context of Saudi Arabia, a Muslim nation. Design/methodology/approach Using panel data from 2009 to 2020, encompassing 78 nonfinancial firms listed on the Saudi Stock Exchange, this study constructs an enhanced measure of Zakat avoidance that integrates insights from tax avoidance research, Shariah principles and the regulations of the Zakat, Tax and Customs Authority. This research uses empirical techniques, including panel data regressions and interaction analysis to investigate how board characteristics may influence this relationship. Findings Descriptive analysis reveals pervasive Zakat compliance, underscoring the effectiveness of Saudi Arabia’s robust Zakat system. Regression results indicate a positive association between Zakat payment and firm value. Remarkably, board characteristics exhibit no significant link to Zakat avoidance, emphasizing the potency of the Zakat system and religious adherence. However, the moderation analysis reveals that board independence and meeting frequency positively moderate the relationship between Zakat avoidance and firm value. Practical implications The study emphasizes the vital importance of upholding Zakat obligations to cultivate trust among stakeholders and amplify firm value. It advocates for governance frameworks that foster vigilant oversight and independence, ultimately enhancing a firm’s overall worth. Furthermore, the study’s findings provide valuable insights for corporate leaders, investors, policymakers and society as a whole, facilitating the promotion of ethical financial conduct and driving holistic economic development. Originality/value This research introduces novel insights by scrutinizing the intricate interplay of Zakat avoidance, board dynamics and firm value within the context of a culturally distinctive emerging economy. The development of a distinct Zakat avoidance metric, along with comprehensive empirical assessment, contributes to the originality of the study. Moreover, the investigation into the moderating influence of board characteristics adds value to the existing body of knowledge.

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Nationality Diversity in Corporate Boards and Tax Avoidance: Evidence from Oman

Cited by 5 publications

References 49 publications

Director's Nationality Diversity and Company Performance: The Evidence From Emerging Market

Director's Nationality Diversity and Company Performance: The Evidence From Emerging Market

Diversity–performance nexus in an emerging economy: an investigation of family and non-family firms

Ethical governance and the board’s moderating role in Zakat avoidance effects on firm value in muslim nations

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