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- Title
Ethnic board diversity, earnings quality and institutional investors: evidence from Malaysian corporate boards.
- Authors
Tee, Chwee Ming; Rassiah, Puspavathy
- Abstract
Motivated by calls to examine the issue of board diversity in emerging economies, this study explores the association between ethnic board diversity and earnings quality; and the moderating effect of institutional investors' ownership. In a sample of Malaysian firms, we find that boards with higher ethnic diversity are associated with higher earnings quality. Consequently, our findings suggest that institutional investors prefer boards to be ethnically diverse. Consistent with geographical proximity theory, this effect is primarily driven by domestic institutional investors. Finally, we find that political connection attenuates the association between ethnic board diversity and higher earnings quality.
- Subjects
CULTURAL pluralism; INSTITUTIONAL investors; CORPORATE directors; CORPORATE profits
- Publication
Accounting & Finance, 2020, Vol 60, Issue 4, p4257
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.12485