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Does board diversity affect institutional investor preferences? Evidence from Latin America

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  • Maria Camila De-La-Hoz
  • Carlos Pombo
  • Rodrigo Taborda

Abstract

This paper enquires whether institutional investors have specific preferences on the composition of the board of directors in Latin American firms they hold shares in. The result show that preferences vary significantly in terms of the type of institutional investor. The econometric results suggest grey institutional investors (pension funds and insurance companies) prefer experience and education, while dislike CEO entrenchment. Independent institutional investors value more directors’ professional experience i.e., former CEOs and founders of any firm. Grey investors are more concern on firm corporate governance mechanisms consistent with the agency view, while independent investors are focused in business opportunities in accordance with the resource-based-view of board of directors.

Suggested Citation

  • Maria Camila De-La-Hoz & Carlos Pombo & Rodrigo Taborda, 2018. "Does board diversity affect institutional investor preferences? Evidence from Latin America," Documentos CEDE 15991, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:015991
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    Cited by:

    1. Shoukat Ali & Ramiz Ur Rehman & Muhammad Ishfaq Ahmad & Joe Ueng, 2021. "Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market," JRFM, MDPI, vol. 14(11), pages 1-15, October.
    2. Shoukat Ali & Ramiz ur Rehman & Wang Yuan & Muhammad Ishfaq Ahmad & Rizwan Ali, 2022. "Does foreign institutional ownership mediate the nexus between board diversity and the risk of financial distress? A case of an emerging economy of China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 553-581, September.

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    More about this item

    Keywords

    Director Heterogeneity; board capital; institutional investor preferences; Latin America;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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