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In a Room Full of Differences, Can You Still Perform?

Jammeh, Lamin LU (2024) NEKP01 20241
Department of Economics
Abstract (Swedish)
This thesis investigates the causal relationship between board diversity and the performance of firms that have gone public in the Nordics through Initial Public Offerings (IPOs) during the 2020s, a period characterised by significant economic, regulatory, and demographic shifts. By implementing a robust instrumental variable (IV) approach with the Bartik shift-share instrument, the study examines how different facets of board diversity—gender, nationality, and age—affect firm performance through accounting– and market-based performance measures for IPOs; Return on Assets (ROA), Price-to-Book-Value (P/BV), and Price-to-Earnings Per Share (P/EPS). The findings challenge the conventional notion, which posits that increased diversity within... (More)
This thesis investigates the causal relationship between board diversity and the performance of firms that have gone public in the Nordics through Initial Public Offerings (IPOs) during the 2020s, a period characterised by significant economic, regulatory, and demographic shifts. By implementing a robust instrumental variable (IV) approach with the Bartik shift-share instrument, the study examines how different facets of board diversity—gender, nationality, and age—affect firm performance through accounting– and market-based performance measures for IPOs; Return on Assets (ROA), Price-to-Book-Value (P/BV), and Price-to-Earnings Per Share (P/EPS). The findings challenge the conventional notion, which posits that increased diversity within corporate boards universally enhances firm performance. Instead, my analysis reveals that gender– and nationality diversity negatively impact ROA and P/BV respectively, whilst age diversity appears to have no significant effect. This nuanced outcome suggests that the benefits of diversity are context-dependent and may vary across different dimensions of diversity and geographic contexts. The thesis underscores the importance of adopting a critical and context-sensitive approach to board composition policies, particularly in the dynamic and diverse economic landscapes of the Nordic region. Through a detailed examination of the causal mechanisms at play, this study contributes to a deeper understanding of the complexities surrounding board diversity and its economic implications, providing valuable insights for academics, policymakers, and practitioners navigating the evolving corporate governance landscape. (Less)
Please use this url to cite or link to this publication:
author
Jammeh, Lamin LU
supervisor
organization
course
NEKP01 20241
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Corporate Governance, Firm Performance, Diversity, Endogeneity, Initial Public Offerings.
language
English
id
9158233
date added to LUP
2024-10-01 13:18:27
date last changed
2024-10-01 13:18:27
@misc{9158233,
  abstract     = {{This thesis investigates the causal relationship between board diversity and the performance of firms that have gone public in the Nordics through Initial Public Offerings (IPOs) during the 2020s, a period characterised by significant economic, regulatory, and demographic shifts. By implementing a robust instrumental variable (IV) approach with the Bartik shift-share instrument, the study examines how different facets of board diversity—gender, nationality, and age—affect firm performance through accounting– and market-based performance measures for IPOs; Return on Assets (ROA), Price-to-Book-Value (P/BV), and Price-to-Earnings Per Share (P/EPS). The findings challenge the conventional notion, which posits that increased diversity within corporate boards universally enhances firm performance. Instead, my analysis reveals that gender– and nationality diversity negatively impact ROA and P/BV respectively, whilst age diversity appears to have no significant effect. This nuanced outcome suggests that the benefits of diversity are context-dependent and may vary across different dimensions of diversity and geographic contexts. The thesis underscores the importance of adopting a critical and context-sensitive approach to board composition policies, particularly in the dynamic and diverse economic landscapes of the Nordic region. Through a detailed examination of the causal mechanisms at play, this study contributes to a deeper understanding of the complexities surrounding board diversity and its economic implications, providing valuable insights for academics, policymakers, and practitioners navigating the evolving corporate governance landscape.}},
  author       = {{Jammeh, Lamin}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{In a Room Full of Differences, Can You Still Perform?}},
  year         = {{2024}},
}