Essays on board diversity: a study of US IPO firms

Sagay, Ruth 2022. Essays on board diversity: a study of US IPO firms. PhD Thesis, Cardiff University. Item availability restricted.

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Abstract

This thesis comprises three empirical chapters on board diversity relating to gender, age, and professional expertise, using a proprietary dataset of 661 US initial public offering (IPO) firms. First, we examine the emergence of board diversity, and the impact of CEO, venture capitalist director, and non-executive director power on the evolution of board diversity. Second, we analyse the impact of board diversity and board connections on IPO survival. Third, we investigate whether board diversity influences innovative activity and innovative efficiency. Due to minimal changes in age diversity, we focus in the first stage on gender and professional expertise diversity. Professional expertise diversity emerges first at the IPO and evolves by year 5 post-IPO, while the first female director is appointed in year 2 post-IPO. CEO duality and non-executive director voting share ownership inhibit gender diversity, while venture capitalist director voting share ownership facilitates the latter. For professional expertise diversity, non-executive director financial expertise is a facilitator, whereas venture capitalist director voting share ownership is an inhibitor. In the second stage, we provide evidence that professional expertise diversity improves IPO survival, but this effect is dampened in better-connected boards. Hence, there is a substitution effect between professional expertise diversity and board connections on IPO survival. Gender and age diversity have no robust relationship with the likelihood of survival post-IPO. In the third stage, we find that professional expertise diversity increases internal innovative input, measured by R&D investment. Thus, IPO firms will benefit from professional expertise diversity at the initial investment phase, but should consider age and gender diversity, which are detrimental to innovative efficiency and external innovation, respectively. In summary, professional expertise diversity emerges around listing and improves IPO survival and investment in innovative activity. Therefore, IPO firms should focus on professional expertise diversity rather than gender or age diversity.

Item Type:	Thesis (PhD)
Date Type:	Completion
Status:	Unpublished
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General)
Uncontrolled Keywords:	Initial public offering firms, Board diversity, Boardroom power, Board connections, Corporate governance, Survival, Corporate innovation
Date of First Compliant Deposit:	1 March 2022
Last Modified:	11 Mar 2023 03:02
URI:	https://orca.cardiff.ac.uk/id/eprint/147933

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