Does board ethnic diversity mitigate bankruptcy risk?

Eunho Cho and Mohammad Hashemi Joo

International Review of Financial Analysis, 2024, vol. 96, issue PA

Abstract: We investigate the relationship between the ethnic diversity of corporate boards, measured by the ratio of minority directors, and bankruptcy risks among manufacturing firms included in S&P 1500. Our findings indicate that companies with a higher representation of minority directors on their boards demonstrate decreased bankruptcy risks compared to companies with lower levels of minority board diversity. This study implies that boards with diverse ethnic backgrounds are better equipped to make balanced decisions and manage bankruptcy risks.

Keywords: Board ethnic diversity; Board diversity; Bankruptcy; Minority directors (search for similar items in EconPapers)
JEL-codes: G33 M10 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005209

DOI: 10.1016/j.irfa.2024.103588

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