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Foreign ownership and board cultural diversity

El Moujahid, Oussama ; Frijns, Bart ; Ravid, S. Abraham LU and Sekerci, Naciye LU (2025) In Journal of Corporate Finance 92.
Abstract

Using detailed hand-collected data on firm ownership and board cultural diversity from Sweden, we find that foreign ownership is positively associated with board cultural diversity. This relationship is not an artifact of foreign owners joining the board, and it is not driven by firms with substantial foreign focus. The presence of foreign owners on nomination committees seems to be the channel through which foreign owners implement cultural diversity. The positive relationship between foreign ownership and board cultural diversity is also more pronounced in firms where owners may have more say (family firms, dual-class share firms, and firms with concentrated ownership). However, we do not find evidence that cultural diversity... (More)

Using detailed hand-collected data on firm ownership and board cultural diversity from Sweden, we find that foreign ownership is positively associated with board cultural diversity. This relationship is not an artifact of foreign owners joining the board, and it is not driven by firms with substantial foreign focus. The presence of foreign owners on nomination committees seems to be the channel through which foreign owners implement cultural diversity. The positive relationship between foreign ownership and board cultural diversity is also more pronounced in firms where owners may have more say (family firms, dual-class share firms, and firms with concentrated ownership). However, we do not find evidence that cultural diversity increases firm value or that it is correlated with other types of diversity. Our preferred interpretation is quasi-homophily.

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author
; ; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Board cultural diversity, Dual-class shares, Foreign owners, Multiple large shareholders, Nomination committees
in
Journal of Corporate Finance
volume
92
article number
102753
publisher
Elsevier
external identifiers
  • scopus:85218854856
ISSN
0929-1199
DOI
10.1016/j.jcorpfin.2025.102753
language
English
LU publication?
yes
id
a19b00a0-f5aa-4859-82b2-937872909226
date added to LUP
2025-06-10 10:19:04
date last changed
2025-06-16 13:11:26
@article{a19b00a0-f5aa-4859-82b2-937872909226,
  abstract     = {{<p>Using detailed hand-collected data on firm ownership and board cultural diversity from Sweden, we find that foreign ownership is positively associated with board cultural diversity. This relationship is not an artifact of foreign owners joining the board, and it is not driven by firms with substantial foreign focus. The presence of foreign owners on nomination committees seems to be the channel through which foreign owners implement cultural diversity. The positive relationship between foreign ownership and board cultural diversity is also more pronounced in firms where owners may have more say (family firms, dual-class share firms, and firms with concentrated ownership). However, we do not find evidence that cultural diversity increases firm value or that it is correlated with other types of diversity. Our preferred interpretation is quasi-homophily.</p>}},
  author       = {{El Moujahid, Oussama and Frijns, Bart and Ravid, S. Abraham and Sekerci, Naciye}},
  issn         = {{0929-1199}},
  keywords     = {{Board cultural diversity; Dual-class shares; Foreign owners; Multiple large shareholders; Nomination committees}},
  language     = {{eng}},
  publisher    = {{Elsevier}},
  series       = {{Journal of Corporate Finance}},
  title        = {{Foreign ownership and board cultural diversity}},
  url          = {{http://dx.doi.org/10.1016/j.jcorpfin.2025.102753}},
  doi          = {{10.1016/j.jcorpfin.2025.102753}},
  volume       = {{92}},
  year         = {{2025}},
}