Board Cultural Diversity and Firm Performance under Competitive Pressures
| Autor: | Olga Dodd, Bart Frijns, Kaiji Gong, Shushu Liao |
|---|---|
| Přispěvatelé: | RS-Research Line Resilience (part of LIRS program), Department of Accounting and Finance |
| Jazyk: | angličtina |
| Rok vydání: | 2022 |
| Zdroj: | Sustainability and Finance Conference Dodd, O, Frijns, B P M, Liao, S & Kaiji Gong, R 2022, ' Board Cultural Diversity and Firm Performance under Competitive Pressures ', Paper presented at Sustainability and Finance Conference, Leuven, Belgium, 5/10/22-5/10/22 . https://doi.org/10.2139/ssrn.4212481 |
| DOI: | 10.2139/ssrn.4212481 |
| Popis: | We examine the impact of board cultural diversity, based on directors’ ancestry, on firmperformance conditional on product market competition. We argue that culturally diverseboards foster critical thinking and offer creative solutions that help firms thrive in competitiveenvironments. We document that culturally diverse boards are associated with superiorperformance for firms operating in highly competitive industries. To address potentialendogeneity, we use a quasi-natural experiment of the U.S. import tariff cuts. We show thatfirms with culturally diverse boards outperform following exogenous competition shocks fromsignificant import tariff reductions. The positive impact of board cultural diversity on firmperformance in competitive markets manifests in firms that innovate more, require creativeinputs, and face heightened predation risk due to their high interdependence with industryrivals, in line with culturally diverse boards effectively performing their advisory role. Lastly,we find no evidence that board cultural diversity is associated with enhanced monitoring as itsbenefits fade in the presence of powerful CEOs. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|