Does diversity of bank board members affect performance and risk? Evidence from an emerging market

Bowo Setiyono () and Amine Tarazi
Additional contact information
Bowo Setiyono: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

Working Papers from HAL

Abstract: This study investigates the influence of background diversity of bank board members on performance and risk. Using data from Indonesian banks from 2001 to 2011 covering 4200 individual year observations and 21 ethnic groups, we estimate the degree of diversity by considering various aspects (gender, citizenship, age, experience, tenure, ethnicity, nationality, education level and type) and find significant impacts on bank performance. On the whole, diversity is in general positively associated with performance except when it relates to ethnicity. It not only reduces performance per se but also increases risk. Female presence and professional diversity reduce risk but nationality and ethnicity diversities are associated with higher risk. Education diversity generally leads to higher income volatility and leverage risk. Our results are generally robust to various alternative performance measures, including risk adjusted returns, and estimation methods.

Keywords: Bank Board; Performance; Risk; Diversity; Ethnicity; Emerging Market (search for similar items in EconPapers)
Date: 2014-09-04
New Economics Papers: this item is included in nep-ban, nep-rmg and nep-sea
Note: View the original document on HAL open archive server: https://unilim.hal.science/hal-01070988v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://unilim.hal.science/hal-01070988v1/document (application/pdf)

Related works:
Chapter: Does Diversity of Bank Board Members Affect Performance and Risk? Evidence from an Emerging Market (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01070988

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().