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We proxy for board members’ differences in opinions and values using directors’ ancestral origins and show that diversity has costs and benefits, which lead to high performance volatility.
Consistent with the idea that diverse groups experiment more, firms with ancestrally diverse boards have more and more cited patents and their strategies conform less to those of the industry peers. However, firms with greater ancestral diversity also have more board meetings, higher director turnover unrelated to performance, and make less predictable decisions. These findings suggest that diversity may lead to inefficiencies in the decision-making process and conflicts in the boardroom.
We examine whether reducing frictions in the labor market affects the performance of private and public firms. Using the staggered adoption of state-level Paid Family Leave acts, we provide causal evidence on the value created by relieving...Read more
We study retail shareholder voting using a detailed and nearly universal sample of anonymized retail shareholder voting records over the period 2015-2017. Contrary to public perception, we find that retail shareholders are an influential voting...Read more
Using a novel dataset of negative news coverage of the environmental and social (E&S) practices of firms around the world, we show that customers and investors can provide market discipline and impose their ethical standards on firm policies...Read more
This paper examines the effect of board gender diversity on renewable energy consumption. Using a sample of 11,677 firm-year observations from the USA for 2008–2016, we find a positive relationship between board gender diversity and renewable...Read more