Board diversity and corporate investment efficiency in emerging markets: an explanation based on principal-agent theory and resource dependence theory

References

• Adams, R. B., B. E. Hermalin, and M. S. Weisbach. 2010. “The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey.” Journal of Economic Literature 48 (1): 58–107. https://doi.org/10.1257/jel.48.1.58.
   Web of Science ®Google Scholar
• Ali, F., M. Wang, K. Jebran, and S. T. Ali. 2021. “Board Diversity and Firm Efficiency: Evidence from China.” Corporate Governance the International Journal of Business in Society 21 (4): 587–607. https://doi.org/10.1108/CG-10-2019-0312.
   Web of Science ®Google Scholar
• An, H., C. R. Chen, Q. Wu, and T. Zhang. 2021. “Corporate Innovation: Do Diverse Boards Help?” The Journal of Financial and Quantitative Analysis 56 (1): 155–182. https://doi.org/10.1017/S0022109019001005.
   Web of Science ®Google Scholar
• Atif, M., M. Hossain, M. S. Alam, and M. Goergen. 2021. “Does Board Gender Diversity Affect Renewable Energy Consumption?” Journal of Corporate Finance 66:101665. https://doi.org/10.1016/j.jcorpfin.2020.101665.
   Web of Science ®Google Scholar
• Beji, R., O. Yousfi, N. Loukil, and A. Omri. 2021. “Board Diversity and Corporate Social Responsibility: Empirical Evidence from France.” Journal of Business Ethics 173 (1): 133–155. https://doi.org/10.1007/s10551-020-04522-4.
   Web of Science ®Google Scholar
• Bernile, G., V. Bhagwat, and S. Yonker. 2018. “Board Diversity, Firm Risk, and Corporate Policies.” Journal of Financial Economics 127 (3): 588–612. https://doi.org/10.1016/j.jfineco.2017.12.009.
   Web of Science ®Google Scholar
• Biddle, G. C., G. Hilary, and R. S. Verdi. 2009. “How Does Financial Reporting Quality Relate to Investment Efficiency?” Journal of Accounting and Economics 48 (2–3): 112–131. https://doi.org/10.1016/j.jacceco.2009.09.001.
   Web of Science ®Google Scholar
• Boivie, S., M. C. Withers, S. D. Graffin, and K. G. Corley. 2021. “Corporate directors’ Implicit Theories of the Roles and Duties of Boards.” Strategic Management Journal 42 (9): 1662–1695. https://doi.org/10.1002/smj.3320.
   Web of Science ®Google Scholar
• Bonini, S. 2015. “Secondary Buyouts: Operating Performance and Investment Determinants.” Financial Management 44 (2): 431–470. https://doi.org/10.1111/fima.12086.
   Web of Science ®Google Scholar
• Burke, J. J., R. Hoitash, and U. Hoitash. 2019. “The Heterogeneity of Board-Level Sustainability Committees and Corporate Social Performance.” Journal of Business Ethics 154 (4): 1161–1186. https://doi.org/10.1007/s10551-017-3453-2.
   Web of Science ®Google Scholar
• Chen, R., S. E. Ghoul, O. Guedhami, and H. Wang. 2017. “Do State and Foreign Ownership Affect Investment Efficiency? Evidence from Privatizations.” Journal of Corporate Finance 42 (2): 408–421. https://doi.org/10.1016/j.jcorpfin.2014.09.001.
   Google Scholar
• Chen, Z., and K. Jiang. 2024. “Digitalization and Corporate Investment Efficiency: Evidence from China.” Journal of International Financial Markets, Institutions and Money 91:101915. https://doi.org/10.1016/j.intfin.2023.101915.
   Web of Science ®Google Scholar
• Chen, S., Z. Sun, S. Tang, and D. Wu. 2011. “Government Intervention and Investment Efficiency: Evidence from China.” Journal of Corporate Finance 17 (2): 259–271. https://doi.org/10.1016/j.jcorpfin.2010.08.004.
   Web of Science ®Google Scholar
• Chod, J., and E. Lyandres. 2021. “A Theory of ICOs: Diversification, Agency, and Information Asymmetry.” Management Science 67 (10): 5969–5989. https://doi.org/10.1287/mnsc.2020.3754.
   Web of Science ®Google Scholar
• Cumming, D., and T. Y. Leung. 2021. “Board Diversity and Corporate Innovation: Regional Demographics and Industry Context.” Corporate Governance an International Review 29 (3): 277–296. https://doi.org/10.1111/corg.12365.
   Web of Science ®Google Scholar
• Engida, T. G., C. F. Parmeter, X. Rao, and A. G. J. M. Oude Lansink. 2022. “Investment Inefficiency and Corporate Social Responsibility.” Journal of Productivity Analysis 58 (1): 95–108. https://doi.org/10.1007/s11123-022-00641-4.
   Google Scholar
• Estélyi, K. S., and T. M. Nisar. 2016. “Diverse Boards: Why Do Firms Get Foreign Nationals on Their Boards?” Journal of Corporate Finance 39:174–192. https://doi.org/10.1016/j.jcorpfin.2016.02.006.
   Web of Science ®Google Scholar
• Fama, E. F., and M. C. Jensen. 1983. “Separation of Ownership and Control.” Journal of Law and Economics 26 (2): 301–325. https://doi.org/10.1086/467037.
   Web of Science ®Google Scholar
• Fang, Y., B. Francis, and I. Hasan. 2018. “Differences Make a Difference: Diversity in Social Learning and Value Creation.” Journal of Corporate Finance 48:474–491. https://doi.org/10.1016/j.jcorpfin.2017.11.015.
   Web of Science ®Google Scholar
• Giannetti, M., G. Liao, and X. Yu. 2015. “The Brain Gain of Corporate Boards: Evidence from China.” The Journal of Finance 70 (4): 1629–1682. https://doi.org/10.1111/jofi.12198.
   Web of Science ®Google Scholar
• Gong, C. M., P. Gong, and M. Jiang. 2023. “Corporate Financialization and Investment Efficiency: Evidence from China.” Pacific-Basin Finance Journal 79:102045. https://doi.org/10.1016/j.pacfin.2023.102045.
   Web of Science ®Google Scholar
• Griffin, D., K. Li, and T. Xu. 2021. “Board Gender Diversity and Corporate Innovation: International Evidence.” Journal of Financial and Quantitative Analysis 56 (1): 123–154. https://doi.org/10.1017/S002210901900098X.
   Web of Science ®Google Scholar
• Hainmueller, J. 2012. “Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies.” Political Analysis 20 (1): 25–46. https://doi.org/10.1093/pan/mpr025.
   Web of Science ®Google Scholar
• Harjoto, M. A., I. Laksmana, and Y. W. Yang. 2018. “Board Diversity and Corporate Investment Oversight.” Journal of Business Research 90:40–47. https://doi.org/10.1016/j.jbusres.2018.04.033.
   Web of Science ®Google Scholar
• Hayashi, F. 1982. “Tobin’s Marginal Q and Average Q: A Neoclassical Interpretation.” Econometrica 50 (1): 213–224. https://doi.org/10.2307/1912538.
   Web of Science ®Google Scholar
• Haynes, K. T., and A. Hillman. 2010. “The Effect of Board Capital and CEO Power on Strategic Change.” Strategic Management Journal 31 (11): 1145–1163. https://doi.org/10.1002/smj.859.
   Web of Science ®Google Scholar
• Hilary, G., and C. Hsu. 2011. “Endogenous Overconfidence in Managerial Forecasts.” Journal of Accounting and Economics 51 (3): 300–313. https://doi.org/10.1016/j.jacceco.2011.01.002.
   Web of Science ®Google Scholar
• Hillman, A. J., and T. Dalziel. 2003. “Boards of Directors and Firm Performance: Integrating Agency and Resource Dependence Perspectives.” Academy of Management Review 28 (3): 383–396. https://doi.org/10.5465/amr.2003.10196729.
   Web of Science ®Google Scholar
• Hillman, A. J., M. C. Withers, and B. J. Collins. 2009. “Resource Dependence Theory: A Review.” Journal of Management 35 (6): 1404–1427. https://doi.org/10.1177/0149206309343469.
   Web of Science ®Google Scholar
• Hou, F., W. Tang, H. Wang, and H. Xiong. 2021. “Economic Policy Uncertainty, Marketization Level and Firm-Level Inefficient Investment: Evidence from Chinese Listed Firms in Energy and Power Industries.” Energy Economics 100:105353. https://doi.org/10.1016/j.eneco.2021.105353.
   Web of Science ®Google Scholar
• Jackson, S. E., A. Joshi, and N. L. Erhardt. 2003. “Recent Research on Team and Organizational Diversity: SWOT Analysis and Implications.” Journal of Management 29 (6): 801–830. https://doi.org/10.1016/S0149-2063(03)00080-1.
   Web of Science ®Google Scholar
• Jensen, M. C. 1986. “Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers.” The American Economic Review 76 (2): 323–329. http://www.jstor.org/stable/1818789.
   Web of Science ®Google Scholar
• Jensen, M. C., and W. H. Meckling. 1976. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3 (4): 305–360. https://doi.org/10.1016/0304-405X(76)90026-X.
   Web of Science ®Google Scholar
• Kang, Y. J., H. Y. Lee, H. Y. Park, and J. H. Park. 2022. “Social Ties, Managerial Overconfidence, and Investment Efficiency.” Finance Research Letters 46:102300. https://doi.org/10.1016/j.frl.2021.102300.
   Web of Science ®Google Scholar
• Karolyi, G. A. 2012. “Corporate Governance, Agency Problems and International Cross-Listings: A Defense of the Bonding Hypothesis.” Emerging Markets Review 13 (4): 516–547. https://doi.org/10.1016/j.ememar.2012.08.001.
   Web of Science ®Google Scholar
• Katmon, N., Z. Z. Mohamad, N. M. Norwani, and O. A. Farooque. 2019. “Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market.” Journal of Business Ethics 157 (2): 447–481. https://doi.org/10.1007/s10551-017-3672-6.
   Web of Science ®Google Scholar
• Khatib, S. F., D. F. Abdullah, A. A. Elamer, and R. Abueid. 2021. “Nudging Toward Diversity in the Boardroom: A Systematic Literature Review of Board Diversity of Financial Institutions.” Business Strategy and the Environment 30 (2): 985–1002. https://doi.org/10.1002/bse.2665.
   Web of Science ®Google Scholar
• Kim, I., C. Pantzalis, and J. C. Park. 2013. “Corporate boards’ Political Ideology Diversity and Firm Performance.” Journal of Empirical Finance 21:223–240. https://doi.org/10.1016/j.jempfin.2013.02.002.
   Web of Science ®Google Scholar
• Lin, Y., X. Yan, and X. Yang. 2023. “Digital Finance and Enterprise Investment Efficiency in China.” International Review of Financial Analysis 90:102929. https://doi.org/10.1016/j.irfa.2023.102929.
   Web of Science ®Google Scholar
• Lo, H. C., and S. R. Shiah-Hou. 2022. “The Effect of CEO Power on Overinvestment.” Review of Quantitative Finance & Accounting 59 (1): 23–63. https://doi.org/10.1007/s11156-022-01060-0.
   Web of Science ®Google Scholar
• Miller, T., and M. Del Carmen Triana. 2009. “Demographic Diversity in the Boardroom: Mediators of the Board Diversity–Firm Performance Relationship.” Journal of Management Studies 46 (5): 755–786. https://doi.org/10.1111/j.1467-6486.2009.00839.x.
   Web of Science ®Google Scholar
• Modigliani, F., and M. H. Miller. 1958. “The Cost of Capital, Corporation Finance and the Theory of Investment.” The American Economic Review 48 (3): 261–297. https://www.jstor.org/stable/1809766.
   Web of Science ®Google Scholar
• Pfeffer, J., and G. R. Salancik. 1978. The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row. https://ssrn.com/abstract=1496213.
   Google Scholar
• Phuong, T. T., A. T. Le, and P. Ouyang. 2022. “Board Tenure Diversity and Investment Efficiency: A Global Analysis.” Journal of International Financial Markets, Institutions and Money 81:101657. https://doi.org/10.1016/j.intfin.2022.101657.
   Web of Science ®Google Scholar
• Richardson, S. 2006. “Over-Investment of Free Cash Flow.” Review of Accounting Studies 11 (2–3): 159–189. https://doi.org/10.1007/s11142-006-9012-1.
   Web of Science ®Google Scholar
• Setia-Atmaja, L., J. Haman, and G. Tanewski. 2011. “The Role of Board Independence in Mitigating Agency Problem II in Australian Family Firms.” The British Accounting Review 43 (3): 230–246. https://doi.org/10.1016/j.bar.2011.06.006.
   Google Scholar
• Siciliano, J. I. 1996. “The Relationship of Board Member Diversity to Organizational Performance.” Journal of Business Ethics 15 (12): 1313–1320. https://doi.org/10.1007/BF00411816.
   Web of Science ®Google Scholar
• Sun, W., X. Xu, and R. Govind. 2022. “Firm Governance and Functional Strengths: The Impact of Board Diversity on Firm Marketing Capability.” British Journal of Management 33 (4): 1950–1968. https://doi.org/10.1111/1467-8551.12561.
   Web of Science ®Google Scholar
• Tuggle, C. S., K. Schnatterly, and R. A. Johnson. 2010. “Attention Patterns in the Boardroom: How Board Composition and Processes Affect Discussion of Entrepreneurial Issues.” Academy of Management Journal 53 (3): 550–571. https://doi.org/10.5465/amj.2010.51468687.
   Web of Science ®Google Scholar
• Upadhyay, A., and H. Zeng. 2014. “Gender and Ethnic Diversity on Boards and Corporate Information Environment.” Journal of Business Research 67 (11): 2456–2463. https://doi.org/10.1016/j.jbusres.2014.03.005.
   Web of Science ®Google Scholar
• Wahid, A. S. 2019. “The Effects and the Mechanisms of Board Gender Diversity: Evidence from Financial Manipulation.” Journal of Business Ethics 159 (3): 705–725. https://doi.org/10.1007/s10551-018-3785-6.
   Web of Science ®Google Scholar
• Yang, X., D. Cao, P. Andrikopoulos, Z. Yang, and T. Bass. 2020. “Online Social Networks, Media Supervision and Investment Efficiency: An Empirical Examination of Chinese Listed Firms.” Technological Forecasting & Social Change 154:119969. https://doi.org/10.1016/j.techfore.2020.119969.
   Web of Science ®Google Scholar
• Yuan, D., D. Shang, Y. Ma, and D. Li. 2022. “The Spillover Effects of Peer Annual Report Tone for Firm Innovation Investment: Evidence from China.” Technological Forecasting and Social Change 177:121518. https://doi.org/10.1016/j.techfore.2022.121518.
   Web of Science ®Google Scholar