The Effect of Board Directors from Countries with Different Genetic Diversity Levels on Corporate Performance

Manthos D. Delis (), Chrysovalantis Gaganis, Iftekhar Hasan and Fotios Pasiouras
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Manthos D. Delis: Surrey Business School, University of Surrey, Surrey GU2 7XH, United Kingdom

Management Science, 2017, vol. 63, issue 1, 231-249

Abstract: We link genetic diversity in the country of origin of the firms’ board members with corporate performance via board members’ nationality. We hypothesize that our approach captures deep-rooted differences in cultural, institutional, social, psychological, physiological, and other traits that cannot be captured by other recently measured indices of diversity. Using a panel of firms listed in the North American and UK stock markets, we find that adding board directors from countries with different levels of genetic diversity (either higher or lower) increases firm performance. This effect prevails when we control for a number of cultural, institutional, firm-level, and board member characteristics, as well as for the nationality of the board of directors. To identify the relationship, we use—as instrumental variables for our diversity indices—the migratory distance from East Africa and the level of ultraviolet exposure in the directors’ country of nationality.

Keywords: genetic diversity; corporate performance; nationality of board members (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (26)

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https://doi.org/10.1287/mnsc.2015.2299 (application/pdf)

Related works:
Working Paper: The Effect of Board Directors from Countries with Different Genetic Diversity Levels on Corporate Performance (2016)
Working Paper: The Effect of Board Directors from Countries with Different Genetic Diversity Levels on Corporate Performance (2015)
Working Paper: The effect of board directors from countries with different genetic diversity levels on corporate performance (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:63:y:2017:i:1:p:231-249

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