Full Citation

Title: Board Ancestral Diversity and Firm Performance Volatility

Citation Type: Working Paper

Publication Year: 2017

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Abstract: We proxy for board members’ differences of opinions and values using directors’ ancestral origins and show that diversity has costs and benefits, which lead to high performance volatility. Consistent with the idea that diverse groups experiment more, firms with diverse boards have more and more cited patents and their strategies conform less to those of the industry peers. However, firms with greater ancestral diversity also have more board meetings, higher director turnover unrelated to performance, and make less predictable decisions. These findings suggest that diversity may lead to inefficiencies in the decisionmaking process and conflicts in the boardroom. Our results do not appear to be driven by firms’ risk-taking or complexity.

Url: http://www.ecgi.global/sites/default/files/working_papers/documents/4622016.pdf

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Authors: Giannetti, Mariassunta; Zhao, Mengxin

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Publication Number: 462/2016

Institution: ECGI

Pages: 50

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Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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