Board diversity and organizational valuation: Unravelling the effects of ethnicity and gender
Board diversity and organizational valuation: Unravelling the effects of ethnicity and gender
Organizational boards of directors are one of the most important subgroups within most modern organizations, performing critical advisory, monitoring and resource dependence roles. This paper investigates the crucial question of whether the stock market values ethnic and gender diversity within organizational boards. We find that board diversity is positively associated with market valuation. We distinctively demonstrate further that ethnic diversity is valued more highly by the stock market than gender diversity. By contrast, we do not find any evidence of a significant non-linear link between board diversity and market valuation. Our findings are robust across a number of econometric models that deal with different types of endogeneities and market valuation measures. Overall, our results are consistent with agency and resource dependence theoretical predictions.
JEL classification: G30, G32, G34, G38
Keywords: organizational governance, organizational valuation, board diversity, ethnicity
and gender, endogeneity
organizational governance, organizational valuation, board diversity, ethnicityand gender, endogeneity
167-195
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
9 August 2015
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
Ntim, Collins G.
(2015)
Board diversity and organizational valuation: Unravelling the effects of ethnicity and gender.
Journal of Management & Governance, 19 (1), .
(doi:10.1007/s10997-013-9283-4).
Abstract
Organizational boards of directors are one of the most important subgroups within most modern organizations, performing critical advisory, monitoring and resource dependence roles. This paper investigates the crucial question of whether the stock market values ethnic and gender diversity within organizational boards. We find that board diversity is positively associated with market valuation. We distinctively demonstrate further that ethnic diversity is valued more highly by the stock market than gender diversity. By contrast, we do not find any evidence of a significant non-linear link between board diversity and market valuation. Our findings are robust across a number of econometric models that deal with different types of endogeneities and market valuation measures. Overall, our results are consistent with agency and resource dependence theoretical predictions.
JEL classification: G30, G32, G34, G38
Keywords: organizational governance, organizational valuation, board diversity, ethnicity
and gender, endogeneity
Text
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- Accepted Manuscript
More information
Published date: 9 August 2015
Keywords:
organizational governance, organizational valuation, board diversity, ethnicityand gender, endogeneity
Organisations:
Centre of Excellence for International Banking, Finance & Accounting, Accounting
Identifiers
Local EPrints ID: 358602
URI: http://eprints.soton.ac.uk/id/eprint/358602
ISSN: 1385-3457
PURE UUID: a982bcea-4722-4c68-9e99-4d576ad5ceb9
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Date deposited: 11 Oct 2013 13:17
Last modified: 15 Mar 2024 02:27
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