Research Discussion Papers, Bank of Finland
Mantos D. Delis
The effect of board directors from countries with different genetic diversity levels on corporate performance
(), Chrysovalantis Gaganis
(), Iftekhar Hasan
() and Fotios Pasiouras
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 U.K. 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; (follow links to similar papers)
JEL-Codes: G30; M10; M14; (follow links to similar papers)
50 pages, August 17, 2015
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- This paper is forthcoming as:
Delis, Mantos D., Chrysovalantis Gaganis, Iftekhar Hasan and Fotios Pasiouras, 'The effect of board directors from countries with different genetic diversity levels on corporate performance', Management Science.
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