The Influence of Board Diversity on Product Diversification and International Diversification

• Main Authors: Jiang, Bo-Han, 江柏翰
• Other Authors: Chang, Yuan
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/v86k5r

碩士 === 國立彰化師範大學 === 財務金融技術學系 === 107 === Based on data of listed nonfinancial-firms on the Taiwan Stock Exchange (TWSE) covering the period of 2010~2015, this master thesis examines the linkage between the degree of corporate board diversity and the extent of product versus international diversification. Existing research on board diversity focusing on examining the effects of board diversity on corporate performance, operational risk and the extent of agency cost. Less discussion paid attention on how board diversity affects the extent of product diversification and international diversification. Product diversification is proxied by the number of sectors, HHI and the Entropy index of the production value versus sales value. To construct the degree of board diversity, a newly constructed index of board diversity is computed from multi dimensions such as board member gender ratio, board member tenure, age, level of education, board busyness (multi-directorship), ratio of board member with professionals on finance, law and accounting, board political connection and board independence. While existing literature has mentioned that board room with greater degree of diversity representing more divergent background and may care more about stakeholder’s interests, this research proposes that firm with greater board tends to help firm to form a corporate strategies with higher degree of product diversification and international diversification. Empirical evidence shows that while overall index of board diversity may decrease the degree of product versus international diversification, sub-index such as busyness and independence increase the degree of product versus international diversification. Through this study, understanding of how board room diversification has influence on corporate strategy toward product versus international diversification is enhanced.