TY - JOUR
T1 - The effect of economic freedom on board diversity
AU - Lee, Sang Mook
AU - Bazel-Shoham, Ofra
AU - Tarba, Shlomo Y.
AU - Shoham, Amir
N1 - Publisher Copyright:
© 2022 Elsevier Inc.
PY - 2022/10
Y1 - 2022/10
N2 - Drawing on institutional theory and homophily network theory, we argue theoretically and support empirically that higher economic freedom reduces the board of director diversity. Using a large U.S. sample of 26,142 firm-year pairs for 1996–2015, we find that firms located in the states with higher economic freedom are less likely to foster gender or ethnic diversity on their boards. The results are robust to a battery of variables that capture differences in economic freedom, gender, and ethnic diversity. The results are also robust to various empirical tests, including endogeneity analyses, such as propensity score matching and the instrumental variable approach.
AB - Drawing on institutional theory and homophily network theory, we argue theoretically and support empirically that higher economic freedom reduces the board of director diversity. Using a large U.S. sample of 26,142 firm-year pairs for 1996–2015, we find that firms located in the states with higher economic freedom are less likely to foster gender or ethnic diversity on their boards. The results are robust to a battery of variables that capture differences in economic freedom, gender, and ethnic diversity. The results are also robust to various empirical tests, including endogeneity analyses, such as propensity score matching and the instrumental variable approach.
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U2 - 10.1016/j.jbusres.2022.05.076
DO - 10.1016/j.jbusres.2022.05.076
M3 - Article
AN - SCOPUS:85131567982
SN - 0148-2963
VL - 149
SP - 833
EP - 849
JO - Journal of Business Research
JF - Journal of Business Research
ER -