THE EFFECT OF DIRECTORS’ DIVERSITY AND CORPORATIONS’ FINANCIAL VARIABLES ON NATIONAL AND MULTINATIONAL OPERATIONS

Rolando Pena-Sanchez, Texas A&M International University, U.S.A.

Published in

JOURNAL OF INTERNATIONAL FINANCE AND ECONOMICS
Volume 18, Issue 4, p41-48, December 2018

ABSTRACT

This essay is oriented to explain the differences between national and multinational operations (dependent variable) of a business corporation based on several observed metric characteristics (independent variables) of the implicated corporation.The study explores the potential of some variables such as the diversity in gender and ethnic origin of corporate directors and the financial variables of the corporation to predict through discriminant analysis whether their operations will be carried nationally, or at multinational level. Given that the organizational tendency of the boards is towards a more heterogeneous composition, it will be necessary to estimate whether the diversity in gender and ethnic origin, as well as business and economic factors such as corporation’s financial performance are variables associated to national or multinational activities. Our results showed that the variables: Firm financial performance, current assets, total assets, long term debt, return on assets, market value of equity, firm economic size, and gender diversity are the most significant dimensions (p-value<0.01) to differentiate national and multinational operations.

Keywords

Board of directors, ethnic and gender diversity, firm financial variables, national and multinational operations, discriminant analysis, SPSS software.


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