Board tenure diversity and investment efficiency: A global analysis

Thao Tran Phuong, Anh-Tuan Le and Puman Ouyang

Journal of International Financial Markets, Institutions and Money, 2022, vol. 81, issue C

Abstract: Using an international sample of firms in 45 countries, we find that board tenure diversity is positively associated with investment efficiency. We alleviate concerns about endogeneity by using a firm fixed effects model, a two-stage least squares regression, and a matching approach. Additional analyses show that the relationship between board tenure diversity and investment efficiency is stronger when the directors have longer tenure and when firms face financial constraints. In addition, better institutional quality, greater shareholder protection, and higher societal trust positively moderate the beneficial impact of board tenure diversity on investment efficiency. Overall, our results highlight the benefits of board tenure diversity in regards to work group diversity and access to resources when making corporate investment decisions.

Keywords: Board tenure diversity; Investment efficiency; Director tenure (search for similar items in EconPapers)
JEL-codes: G31 G32 G34 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:81:y:2022:i:c:s1042443122001299

DOI: 10.1016/j.intfin.2022.101657

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