Foreign ownership and board cultural diversity

Oussama El Moujahid, Bart Frijns, S. Abraham Ravid and Naciye Sekerci

Journal of Corporate Finance, 2025, vol. 92, issue C

Abstract: Using detailed hand-collected data on firm ownership and board cultural diversity from Sweden, we find that foreign ownership is positively associated with board cultural diversity. This relationship is not an artifact of foreign owners joining the board, and it is not driven by firms with substantial foreign focus. The presence of foreign owners on nomination committees seems to be the channel through which foreign owners implement cultural diversity. The positive relationship between foreign ownership and board cultural diversity is also more pronounced in firms where owners may have more say (family firms, dual-class share firms, and firms with concentrated ownership). However, we do not find evidence that cultural diversity increases firm value or that it is correlated with other types of diversity. Our preferred interpretation is quasi-homophily.

Keywords: Board cultural diversity; Foreign owners; Nomination committees; Multiple large shareholders; Dual-class shares (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:92:y:2025:i:c:s0929119925000215

DOI: 10.1016/j.jcorpfin.2025.102753

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