The Impact of Board Demographic Diversity on the Financial Performance of Banks in Ethiopia
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Date
2019-09
Authors
Melese, Sitotaw
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U.
Abstract
This thesis examined the impact of demographic diversity in terms of gender, ethnicity and age of the BOD on financial performance of banks in Ethiopia. The theoretical foundations of the study suggest that the aspects of demographic diversity have positive, negative or no effect on financial. Financial performance- the dependent variable- was measured using ROA and ROE. The independent variables were gender, ethnic and age diversity. Gender was measured using percentage of women from the total board; ethnic diversity as a dummy variable and age diversity using CV of age. Data on board profile using a checklist and financial statements of banks was collected for five years period 2006-2010 E.C(2013/14-2017/18 G.C). The data was analyzed using fixed effect regression technique with the help of Stata. Hausman was used to choose between fixed and random effect models. The findings reveal that gender, ethnic and age diversity have no effect on financial performance. The empirical data from banks fails to establish any relationship between age, gender and ethnic diversity and ROA and ROE. Thus, the hypotheses that gender, ethnic and age diversity have an impact was not supported by the empirical data. The empirical data only supports the theoretical proposition of no relationship between the dependent and independent variables. All in all, this empirical study contributes to make sense of the inconclusive results of past studies and gives theoretical and practical implications for policy makers and the management of modern companies.
Description
A thesis submitted in partial fulfillment of the requirements for Masters of Business Administration-Finance (MBA)
Keywords
Demographic Diversity, Ethiopia, Financial Performance