Board diversity and firm performance: the Indonesian evidence

Darmadi, Salim (2010): Board diversity and firm performance: the Indonesian evidence. Published in: Corporate Ownership and Control , Vol. 1, No. 9 (2011): pp. 524-539.

Abstract

This paper examines the associations between diversity of board members and financial performance of the firms listed on the Indonesia Stock Exchange (IDX). Three demographic characteristics of board members—gender, nationality, and age—are used as the proxies for diversity. Using a sample of 169 listed firms, this study finds that both accounting and market performance have significant negative associations with gender diversity. Nationality diversity is found to have no influence on firm performance. In contrast, the proportion of young members is positively related to market performance, providing evidence that young people in the boardrooms are associated with improved financial performance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate governance; board diversity; financial performance; Indonesia
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants ; Non-labor Discrimination; G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General; J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender ; Non-labor Discrimination

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