Board Diversity and Firm Performance in the U.S. Tourism Sector: The Effect of Institutional Ownership

Document Type

Article

Publication Date

1-1-2020

Publication Title

International Journal of Hospitality Management

Volume

91

First page number:

1

Last page number:

11

Abstract

This study examines the relationship between board diversity and firm performance in the U.S. tourism sector by using institutional ownership as a contingency that moderates this relationship. The study's sample includes publicly-traded companies from the U.S. restaurant, hotel and airline industries. The hypotheses are tested via two-way fixed-effects regression, and the findings of the study indicate that board diversity is positively associated with financial performance (Tobin's Q), and the effect of board diversity on performance is contingent on the degree of institutional ownership. More precisely, the study finds that board diversity has a larger effect on financial performance when institutional ownership is low on a tourism firm's ownership structure. Overall, the findings suggest that boards' internal control and monitoring on management is important to derive higher financial performance, and even yet it is more important when external monitoring by institutional owners, proxied by percentage of institutional ownership, is weak

Keywords

Board diversity; Board of directors; Firm performance; Governance; Institutional ownership

Disciplines

Business | Hospitality Administration and Management | Tourism and Travel

Language

English

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