Footnote:
In: Corporate Governance, Vol. 20 No. 6, pp. 1105-1134, 2020
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 5, 2020 erstellt
Description:
Purpose: We explore how multiple facets of board diversity influence technical efficiency and total factor productivity.Methodology: We measure board diversity in two dimensions: relation-related dimension (age and gender) and task-related dimension (tenure, education, and expertise). We employ a balanced panel data of 806 non-financial Chinese firms over the period 2009 to 2017. We use a two-stage approach for analysis. In the first stage, we use a non-parametric frontier approach to calculate the technical efficiency and factor productivity scores. In the second stage, we regressed these scores on board diversity attributes (relation-related diversity and task-related diversity).Findings: By employing Tobit regression and two-step system GMM, we find that board diversity improves technical efficiency and total factor productivity. Our analyses illustrate that a higher diversity on corporate board (in terms of age, gender, tenure, education, and expertise) positively influence firm efficiency.Implications: Our findings have important implications for policymakers. We suggest that regulators should devise policies to encourage board diversity. Because a diverse board can bring knowledge, skills, abilities, expertise, and experience of diverse group members, which will ultimately enhance a firm’s efficiency. Especially, in the emerging markets (like China), there is still need for standard governance mechanisms, therefore we suggest that policymakers should develop regulations and promote diversity of directors, as one of the factors for improving the governance mechanisms, which will ultimately improve firms productivity.Originality/Value: Prior studies mostly considered only one dimension (such as gender) of diversity, and therefore have overlooked how other dimensions influence firms. We consider several dimensions of diversity and quantify them into relation-related (age and gender) and task-related (tenure, education, and expertise) attributes, and show how they influence firms’ efficiency. To the best of the authors' knowledge, this is the first study to comprehensively investigate how several facets of diversity influence a firm’s technical efficiency and total factor productivity