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Board human capital diversity and firm performance: evidence from top listed Indian firms

Board human capital diversity and firm performance: evidence from top listed Indian firms This study aims to examine the impact of board human capital diversity, measured by educational qualification diversity and gender diversity on the financial performance of Indian firms after controlling corporate governance (CG) and firm-specific variables.Design/methodology/approachThis study is based on a panel data set of top 100 listed Indian firms for a period of five years. The authors use Blau index and Shannon index to compute qualification diversity. The authors use three-stage least square (3SLS) model to deal with the potential endogeneity issue in the association of human capital diversity variables and other CG variables with firm performance. Further, the authors adopt generalized estimating equation (GEE) model for robustness check.FindingsThe authors find a significant positive impact of board’s educational diversity as well as gender diversity on the financial performance of firms. Additionally, they extricate highly significant positive interaction impact of board’s educational diversity and gender diversity on the financial performance of firms. Further, the results indicate a significant positive impact of board size, board independence, ownership concentration, family ownership and audit committee independence on firm performance, while CEO duality exhibits a significant negative impact on firm performance.Originality/valueThis study fills the existing gap in literature by extending the performance implications of board’s human capital diversity for top listed Indian firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Indian Business Research Emerald Publishing

Board human capital diversity and firm performance: evidence from top listed Indian firms

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References (82)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1755-4195
eISSN
1755-4195
DOI
10.1108/jibr-08-2021-0289
Publisher site
See Article on Publisher Site

Abstract

This study aims to examine the impact of board human capital diversity, measured by educational qualification diversity and gender diversity on the financial performance of Indian firms after controlling corporate governance (CG) and firm-specific variables.Design/methodology/approachThis study is based on a panel data set of top 100 listed Indian firms for a period of five years. The authors use Blau index and Shannon index to compute qualification diversity. The authors use three-stage least square (3SLS) model to deal with the potential endogeneity issue in the association of human capital diversity variables and other CG variables with firm performance. Further, the authors adopt generalized estimating equation (GEE) model for robustness check.FindingsThe authors find a significant positive impact of board’s educational diversity as well as gender diversity on the financial performance of firms. Additionally, they extricate highly significant positive interaction impact of board’s educational diversity and gender diversity on the financial performance of firms. Further, the results indicate a significant positive impact of board size, board independence, ownership concentration, family ownership and audit committee independence on firm performance, while CEO duality exhibits a significant negative impact on firm performance.Originality/valueThis study fills the existing gap in literature by extending the performance implications of board’s human capital diversity for top listed Indian firms.

Journal

Journal of Indian Business ResearchEmerald Publishing

Published: Nov 29, 2022

Keywords: Board human capital diversity; Firm performance; 3SLS model; GEE model; India; G30; G34; J3

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