The impact of cultural diversity in corporate boards on firm performance

Frijns, Bart; Dodd, Olga; Cimerova, Helena

doi:10.1016/j.jcorpfin.2016.07.014

Cited by 193 publications

(127 citation statements)

References 58 publications

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“…Cultural traits enhancing equality, independence from political influence or individual status have also been proved to be conducive to economic growth (Voigt, Gutmann, & Feld, 2015). Our finding suggests that a country's openness to diversity strengthens the effect of board diversity reforms on banks' overall performance and is, therefore, an important factor to be considered when assessing the impact of reforms (Frijns, Dodd, & Cimerova, 2016).…”

Section: Stockmentioning

confidence: 61%

Board diversity reforms: Do they matter for EU bank performance?

Arnaboldi

Casu

Kalotychou

et al. 2019

Euro Fin Management

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We examine the impact of governance reforms related to board diversity on the performance of European Union banks. Using a difference‐in‐difference approach, we document that reforms increase bank stock returns and their volatility within the first 3 years after their enactment. The type of reform matters, with quotas increasing return volatility. The effectiveness of reforms depends on a country's institutional environment. The impact of reforms on return volatility is found to be beneficial in countries more open to diversity, with common law system and with greater economic freedom. Finally, reforms play a bigger role in banks that have ex ante less heterogeneous boards.

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Section: Stockmentioning

confidence: 61%

Board diversity reforms: Do they matter for EU bank performance?

Arnaboldi

Casu

Kalotychou

et al. 2019

Euro Fin Management

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“…The other results are consistent with Tables 3 and 4, and our conclusions unchanged. 12 outcomes (Frijns, Dodd and Cimerova, 2016;Masulis, Wang and Xie, 2012). However, board ethnic diversity and national diversity are empirically distinct: the correlation between the fraction of ethnic minority directors (being an ethnic minority director) and the fraction of foreign directors (being a foreign director) is just 0.065 (0.089).…”

Section: Robustness Testsmentioning

confidence: 99%

“…Carter et al (2010) control for the possibility that past performance influences board diversity, but not future performance. 3 Studies have also illustrated the importance of nationality (Frijns, Dodd and Cimerova, 2016;Masulis, Wang and Xie, 2012), financial expertise (Guner, Malmendier and Tate, 2008), political experience (Agrawal and Knoeber, 2001;Goldman, Rocholl and So, 2009) and occupation [CEOs (Fahlenbrach, Low and Stulz, 2010), bankers (Dittman, Maug and Scheider, 2010), academics (Francis, Hasan and Wu, 2015;White et al, 2014) and former CEOs (Fahlenbrach, Minton and Pan, 2011)]. and analysis.…”

Section: Introductionmentioning

confidence: 99%

Does Board Ethnic Diversity Impact Board Monitoring Outcomes?

Guest

2019

British J of Management

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This study investigates whether board ethnic diversity is associated with stronger board monitoring outcomes. We explore a range of outcomes -CEO compensation, accounting misstatements, CEO turnover-performance sensitivity and acquisition performance -but find no evidence to support this. We also find no evidence that board ethnic diversity improves overall firm performance, even for those firms with higher agency problems. Our results are robust across different methodologies and have important practical implications, by informing the current public policy debate on board ethnic diversity.

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“…The first impact is on the internal management process. In multicultural organizations, communication costs are higher, making collaboration more difficult and worsening company performance [7]. IJVS usually adopt joint review and collective decision-making in management, which is quite different from the Chinese shareholders' philosophy of highlighting the main person in charge.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…As a type of cross-border cooperation by FDI, IJVS regularly faces cross-border management involvement [4]. This makes the performance even more susceptible to various factors, for example, culture [5][6][7][8][9]. Although many scholars found the impact of culture on performance, the results remain mixed, especially for emerging markets, and to the best of our knowledge, there are no studies investigating the role of cultural difference in explaining the poor performance of IJVS.…”

Section: Introductionmentioning

confidence: 99%

The Influence of Risk Culture on the Performance of International Joint-Venture Securities

Tang

Wang

et al. 2020

Sustainability

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With the development of economic globalization, culture is a key factor supporting the sustainability of foreign direct investment (FDI), especially for multinational enterprises. This paper takes the Chinese capital market as a sample and, combined with interviews with managers of international joint-venture securities (IJVS), finds that the culture of participants formed in developed and emerging capital market has a significant impact on the performance of IJVS. Using the degree of price fluctuation to measure the risk culture of each capital market, this paper observes that the risk culture in the Chinese capital market is significantly stronger than that of developed countries. This paper also finds that the stronger the risk culture IJVS shareholders have, the better they can adapt to the environment of the Chinese capital market and the better the performance they can achieve. Furthermore, risk culture distance, calculated by the risk culture differences between foreign shareholders and Chinese capital market, are significantly negatively correlated with IJVS performance and efficiency.

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The impact of cultural diversity in corporate boards on firm performance

Cited by 193 publications

References 58 publications

Board diversity reforms: Do they matter for EU bank performance?

Board diversity reforms: Do they matter for EU bank performance?

Does Board Ethnic Diversity Impact Board Monitoring Outcomes?

The Influence of Risk Culture on the Performance of International Joint-Venture Securities

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