Brain-Gain Directors, Board Gender Diversity, and Firm Performance
Using a sample of 5,039 hand-collected panel data from Bursa Malaysia spanning 2009 to 2015, this study examines the impact of brain-gain directors (i.e., foreign directors and returnee directors) on firm performance. A two-step robust system GMM is implemented to control for data endogeneity. In li...
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| Format: | Article |
| Language: | English |
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SAGE Publishing
2025-05-01
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| Series: | SAGE Open |
| Online Access: | https://doi.org/10.1177/21582440251337242 |
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| author | Shu-Fen Chuah Char-Lee Lok Chee-Wooi Hooy |
| author_facet | Shu-Fen Chuah Char-Lee Lok Chee-Wooi Hooy |
| author_sort | Shu-Fen Chuah |
| collection | DOAJ |
| description | Using a sample of 5,039 hand-collected panel data from Bursa Malaysia spanning 2009 to 2015, this study examines the impact of brain-gain directors (i.e., foreign directors and returnee directors) on firm performance. A two-step robust system GMM is implemented to control for data endogeneity. In line with the resource-based theory, the findings show that brain-gain directors are positively associated with firm performance. Specifically, for each additional foreign director or returnee director on the board, firm performance is expected to increase by an average of 7.41% and 3.23%, respectively. This indicates that a director’s foreign exposure and connectivity are valuable firm resources, with foreign-born directors contributing more significantly to firm performance due to their greater international experience and resources compared to returnee directors. However, further analysis reveals that this positive relationship diminishes when the board consists solely of males, suggesting that gender diversity on the board is essential for brain-gain directors to effectively contribute. A diverse range of directors across borders (e.g., nationality and international working/tertiary education background) and genders represents a spectrum of assets that could potentially provide competitive advantages to firms. The results align with the resource-based theory and support the implementation of brain gain and corporate governance policies that encourage greater female representation on boards. JEL Classification: G3, G34, M14, M51, I28, J18. |
| format | Article |
| id | doaj-art-0e9195522da042cc929a4aa459aa93a6 |
| institution | OA Journals |
| issn | 2158-2440 |
| language | English |
| publishDate | 2025-05-01 |
| publisher | SAGE Publishing |
| record_format | Article |
| series | SAGE Open |
| spelling | doaj-art-0e9195522da042cc929a4aa459aa93a62025-08-20T01:57:01ZengSAGE PublishingSAGE Open2158-24402025-05-011510.1177/21582440251337242Brain-Gain Directors, Board Gender Diversity, and Firm PerformanceShu-Fen Chuah0Char-Lee Lok1Chee-Wooi Hooy2 Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, Terengganu, Malaysia School of Management, Universiti Sains Malaysia, Penang, Malaysia School of Management, Universiti Sains Malaysia, Penang, MalaysiaUsing a sample of 5,039 hand-collected panel data from Bursa Malaysia spanning 2009 to 2015, this study examines the impact of brain-gain directors (i.e., foreign directors and returnee directors) on firm performance. A two-step robust system GMM is implemented to control for data endogeneity. In line with the resource-based theory, the findings show that brain-gain directors are positively associated with firm performance. Specifically, for each additional foreign director or returnee director on the board, firm performance is expected to increase by an average of 7.41% and 3.23%, respectively. This indicates that a director’s foreign exposure and connectivity are valuable firm resources, with foreign-born directors contributing more significantly to firm performance due to their greater international experience and resources compared to returnee directors. However, further analysis reveals that this positive relationship diminishes when the board consists solely of males, suggesting that gender diversity on the board is essential for brain-gain directors to effectively contribute. A diverse range of directors across borders (e.g., nationality and international working/tertiary education background) and genders represents a spectrum of assets that could potentially provide competitive advantages to firms. The results align with the resource-based theory and support the implementation of brain gain and corporate governance policies that encourage greater female representation on boards. JEL Classification: G3, G34, M14, M51, I28, J18.https://doi.org/10.1177/21582440251337242 |
| spellingShingle | Shu-Fen Chuah Char-Lee Lok Chee-Wooi Hooy Brain-Gain Directors, Board Gender Diversity, and Firm Performance SAGE Open |
| title | Brain-Gain Directors, Board Gender Diversity, and Firm Performance |
| title_full | Brain-Gain Directors, Board Gender Diversity, and Firm Performance |
| title_fullStr | Brain-Gain Directors, Board Gender Diversity, and Firm Performance |
| title_full_unstemmed | Brain-Gain Directors, Board Gender Diversity, and Firm Performance |
| title_short | Brain-Gain Directors, Board Gender Diversity, and Firm Performance |
| title_sort | brain gain directors board gender diversity and firm performance |
| url | https://doi.org/10.1177/21582440251337242 |
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