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Board diversity and firm performance: the Indonesian evidence

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  • Darmadi, Salim
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    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.

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    File URL: http://mpra.ub.uni-muenchen.de/38721/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38721.

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    Date of creation: 31 Jun 2010
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    Publication status: Published in Corporate Ownership and Control 9.1(2011): pp. 524-539
    Handle: RePEc:pra:mprapa:38721

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    Keywords: Corporate governance; board diversity; financial performance; Indonesia;

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