Does the board diversity impact bank performance in the MENA countries? A multilevel study
ISSN: 1472-0701
Article publication date: 24 March 2021
Issue publication date: 28 July 2021
Abstract
Purpose
The purpose of this study is to examine the impact of board diversity (e.g. nationality, gender and educational level) on financial performance for a sample of banks listed in 11 countries in the Middle East and North Africa region.
Design/methodology/approach
This paper uses the system generalized method of moments estimation approach on the data of banks listed in the MENA countries over the period 2011–2018 to investigate the relationship between board diversity and financial performance. Also, the findings are supported by additional robustness tests, including ordinary least squares, fixed and random effect techniques.
Findings
The empirical results show that there is a significant relationship between board diversity and financial performance in banks. Specifically, the findings demonstrate that board diversity related to nationality has a significant positive impact on bank performance. The findings also show an insignificant association between gender and educational level diversity and bank performance. The robustness analysis supports the findings of the baseline model.
Practical implications
The study provides multi-country evidence on the importance of board diversity in the MENA region and it sheds light on possible tracks for future reforms aimed at enhancing the effectiveness of the board’s functions.
Originality/value
This paper extends the existing literature by providing empirical evidence on the association between board diversity and financial performance of banks in the MENA countries. This paper also provides preliminary evidence on the importance of board diversity to influence financial performance.
Keywords
Acknowledgements
The authors would like to thank the editor of Corporate Governance and two anonymous reviewers for their valuable comments on the previous versions of this paper.
Citation
Issa, A., Yousef, H., Bakry, A., Hanaysha, J.R. and Sahyouni, A. (2021), "Does the board diversity impact bank performance in the MENA countries? A multilevel study", Corporate Governance, Vol. 21 No. 5, pp. 865-891. https://doi.org/10.1108/CG-06-2020-0222
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited