Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market

The study aimed to empirically investigate the impact of board diversity variables (age, gender, nationality, education, tenure, and expertise) on the investment preferences of foreign institutional investors in an emerging market, China. For this, sample data consisted of 1374 nonfinancial Chinese...

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Autores principales:	Shoukat Ali, Ramiz Ur Rehman, Muhammad Ishfaq Ahmad, Joe Ueng
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	board diversity foreign institutional ownership signaling theory gender equality Risk in industry. Risk management HD61 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/8d714b29e04b42738047aaea2d0f226b
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spelling	oai:doaj.org-article:8d714b29e04b42738047aaea2d0f226b2021-11-25T18:08:23ZDoes Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market10.3390/jrfm141105071911-80741911-8066https://doaj.org/article/8d714b29e04b42738047aaea2d0f226b2021-10-01T00:00:00Zhttps://www.mdpi.com/1911-8074/14/11/507https://doaj.org/toc/1911-8066https://doaj.org/toc/1911-8074The study aimed to empirically investigate the impact of board diversity variables (age, gender, nationality, education, tenure, and expertise) on the investment preferences of foreign institutional investors in an emerging market, China. For this, sample data consisted of 1374 nonfinancial Chinese firms from 2009 to 2018. The study used OLS regression as a baseline regression, a fixed effect model to control omitted variable bias, and the two-step systems GMM model to control the endogeneity problem. The study revealed that board diversity variables (gender, nationality, education, and financial expertise) are positively associated with foreign institutional ownership in Chinese nonfinancial firms, implying that foreign institutional investors own a high percentage of Chinese nonfinancial firms with diversity of gender, nationality, education, and financial expertise. Age and tenure of board diversity, on the other hand, have little correlation with foreign institutional ownership. Further, the robustness regressions also confirmed the relationship between board diversity and foreign institutional ownership. This study made a unique attempt to provide empirical evidence that firms having diverse boards attract foreign institutional ownership by reducing asymmetric information.Shoukat AliRamiz Ur RehmanMuhammad Ishfaq AhmadJoe UengMDPI AGarticleboard diversityforeign institutional ownershipsignaling theorygender equalityRisk in industry. Risk managementHD61FinanceHG1-9999ENJournal of Risk and Financial Management, Vol 14, Iss 507, p 507 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	board diversity foreign institutional ownership signaling theory gender equality Risk in industry. Risk management HD61 Finance HG1-9999
spellingShingle	board diversity foreign institutional ownership signaling theory gender equality Risk in industry. Risk management HD61 Finance HG1-9999 Shoukat Ali Ramiz Ur Rehman Muhammad Ishfaq Ahmad Joe Ueng Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market
description	The study aimed to empirically investigate the impact of board diversity variables (age, gender, nationality, education, tenure, and expertise) on the investment preferences of foreign institutional investors in an emerging market, China. For this, sample data consisted of 1374 nonfinancial Chinese firms from 2009 to 2018. The study used OLS regression as a baseline regression, a fixed effect model to control omitted variable bias, and the two-step systems GMM model to control the endogeneity problem. The study revealed that board diversity variables (gender, nationality, education, and financial expertise) are positively associated with foreign institutional ownership in Chinese nonfinancial firms, implying that foreign institutional investors own a high percentage of Chinese nonfinancial firms with diversity of gender, nationality, education, and financial expertise. Age and tenure of board diversity, on the other hand, have little correlation with foreign institutional ownership. Further, the robustness regressions also confirmed the relationship between board diversity and foreign institutional ownership. This study made a unique attempt to provide empirical evidence that firms having diverse boards attract foreign institutional ownership by reducing asymmetric information.
format	article
author	Shoukat Ali Ramiz Ur Rehman Muhammad Ishfaq Ahmad Joe Ueng
author_facet	Shoukat Ali Ramiz Ur Rehman Muhammad Ishfaq Ahmad Joe Ueng
author_sort	Shoukat Ali
title	Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market
title_short	Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market
title_full	Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market
title_fullStr	Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market
title_full_unstemmed	Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market
title_sort	does board diversity attract foreign institutional ownership? insights from the chinese equity market
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/8d714b29e04b42738047aaea2d0f226b
work_keys_str_mv	AT shoukatali doesboarddiversityattractforeigninstitutionalownershipinsightsfromthechineseequitymarket AT ramizurrehman doesboarddiversityattractforeigninstitutionalownershipinsightsfromthechineseequitymarket AT muhammadishfaqahmad doesboarddiversityattractforeigninstitutionalownershipinsightsfromthechineseequitymarket AT joeueng doesboarddiversityattractforeigninstitutionalownershipinsightsfromthechineseequitymarket
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Does Board Diversity Attract Foreign Institutional Ownership? Insights from the Chinese Equity Market

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