Does board diversity reduce the probability of financial distress? Evidence from Chinese firms

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62690094%3A18450%2F22%3A50019510" target="_blank" >RIV/62690094:18450/22:50019510 - isvavai.cz</a>

Výsledek na webu

<a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2022.976345/full" target="_blank" >https://www.frontiersin.org/articles/10.3389/fpsyg.2022.976345/full</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.3389/fpsyg.2022.976345" target="_blank" >10.3389/fpsyg.2022.976345</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Does board diversity reduce the probability of financial distress? Evidence from Chinese firms

Popis výsledku v původním jazyce

This paper empirically investigates the impact of cognitive board diversity in education, expertise, and tenure facets on financial distress likelihood in the emerging economy of China. This study examines how this relationship varies across State-Owned Enterprises (SOEs) and Non-State-Owned Enterprises (NSOEs). Paper argues that the Chinese stock market, as a typical emerging market, is an excellent laboratory for studying the impact of board diversity on the probability of financial distress. Its underdeveloped financial system and inadequate investor protection leave firms unprotected from financial hardship. A sample of 12,366 observations from 1,374 firms from 2010 to 2018 shows that cognitive diversity qualities are positively linked with Z-score, implying that directors with different educational backgrounds, financial skills, and tenures can assist in reducing the probability of financial distress. Cognitive board diversity reduces the likelihood of financial distress in SOEs and NSOEs. However, tenure diversity is insignificant in all cases. Furthermore, the robustness model &quot;two-step system Generalized Methods of Moments (GMM)&quot; demonstrated a positive association between educational diversity, financial expertise, and financial distress scores. The results have significant implications for researchers, managers, investors, regulators, and policymakers.

Název v anglickém jazyce

Does board diversity reduce the probability of financial distress? Evidence from Chinese firms

Popis výsledku anglicky

This paper empirically investigates the impact of cognitive board diversity in education, expertise, and tenure facets on financial distress likelihood in the emerging economy of China. This study examines how this relationship varies across State-Owned Enterprises (SOEs) and Non-State-Owned Enterprises (NSOEs). Paper argues that the Chinese stock market, as a typical emerging market, is an excellent laboratory for studying the impact of board diversity on the probability of financial distress. Its underdeveloped financial system and inadequate investor protection leave firms unprotected from financial hardship. A sample of 12,366 observations from 1,374 firms from 2010 to 2018 shows that cognitive diversity qualities are positively linked with Z-score, implying that directors with different educational backgrounds, financial skills, and tenures can assist in reducing the probability of financial distress. Cognitive board diversity reduces the likelihood of financial distress in SOEs and NSOEs. However, tenure diversity is insignificant in all cases. Furthermore, the robustness model &quot;two-step system Generalized Methods of Moments (GMM)&quot; demonstrated a positive association between educational diversity, financial expertise, and financial distress scores. The results have significant implications for researchers, managers, investors, regulators, and policymakers.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50103 - Cognitive sciences

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2022

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Frontiers in psychology

ISSN

1664-1078

e-ISSN

1664-1078

Svazek periodika

13

Číslo periodika v rámci svazku

September

Stát vydavatele periodika

CH - Švýcarská konfederace

Počet stran výsledku

12

Strana od-do

"Article Number: 976345"

Kód UT WoS článku

000862427700001

EID výsledku v databázi Scopus

2-s2.0-85139195593