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Board Diversity and Accounting Conservatism: Evidence from Jordan

Mohammed Hassan Makhlouf, Fares Jamiel Al-Sufy and Haitham Almubaideen

International Business Research, 2018, vol. 11, issue 7, 130-141

Abstract: The main aim of this research is to investigate whether board diversity affect the accounting conservatism. This study depends on a panel data set drawn from 68 industrial firms listed on Amman Stock Exchange (ASE) for the period from 2013 to 2016. Four demographic characteristics of directors have been investigated, namely: gender diversity, education level, average age and nationality diversity. Accounting conservatism was measured by accrual-based conservatism. The results indicate that gender diversity, education level and nationality diversity are significantly positively correlated with accounting conservatism. However, the findings fail to reveal any significant effect for directors' age on accounting conservatism. The findings of this study assert that it is necessary to take board diversity (directors' demographic characteristics) into account when choosing board of directors members because demographic characteristics diversity influences directors' behavior to deal with different issues that are related to accounting principles.

Keywords: board diversity; female; education level; age; nationality diversity; accounting conservatism; Jordan (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2018
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