Examination of the moderating effect of country cultural dimensions on the relation between board gender diversity and firm financial performance

Abstract

The thesis aims to make sense of some inconclusive results that exist in the current academic literature by examining how culture moderates the relation between board gender diversity and firm financial performance. In doing so, board gender diversity is measured by the percentage of female board members, firm financial performance is measured by Return on Assets, Return on Equity and Tobin’s Q and culture is measured by Hofstede’s cultural dimensions power distance, individualism, uncertainty avoidance and masculinity. The thesis uses the data of 260 listed firms in 13 different countries and performs a multilevel analysis. The results of the thesis suggest that power distance positively moderates, individualism negatively moderates and masculinity positively moderates the relation between board gender diversity and some of the measures for firm financial performance. These results confirm that there might be an influence of culture on the relation between board gender diversity and certain measures of firm financial performance. Therefore, the thesis contributes to the existing literature by providing a possible explanation for the inconclusive results.