Boardroom diversity and financial performance in Palestinian banks and insurers
Abstract This study examines the impact of board diversity—precisely age, nationality, and experience—on the financial performance of 13 Palestinian banks and insurance companies listed on the Palestine Stock Exchange (PEX) from 2011 to 2022. Using a comprehensive panel data approach and controlling...
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| Format: | Article |
| Language: | English |
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Springer
2025-01-01
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| Series: | Discover Sustainability |
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| Online Access: | https://doi.org/10.1007/s43621-025-00836-3 |
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| author | Aladdin Dwekat Abdulmalik Taweel Ali Salameh |
| author_facet | Aladdin Dwekat Abdulmalik Taweel Ali Salameh |
| author_sort | Aladdin Dwekat |
| collection | DOAJ |
| description | Abstract This study examines the impact of board diversity—precisely age, nationality, and experience—on the financial performance of 13 Palestinian banks and insurance companies listed on the Palestine Stock Exchange (PEX) from 2011 to 2022. Using a comprehensive panel data approach and controlling for endogeneity with a two-step system Generalized Method of Moments (GMM) estimator, the analysis explores how diverse board characteristics influence financial outcomes measured by ROA and ROE. Unlike previous studies focused mainly on developed markets or gender diversity, this research offers new insights into the role of board diversity in emerging economies, particularly in the Middle Eastern context. The results reveal that while age diversity negatively impacts firm performance, experience diversity positively correlates, underscoring the importance of industry-specific expertise in financial governance. Nationality diversity, however, exhibits no significant effect, suggesting that foreign representation may introduce complexity without necessarily enhancing performance. These findings contribute to Agency Theory, Upper Echelons Theory, and Resource Dependence Theory, offering practical recommendations for regulators and firms in developing markets to optimise board composition. This study expands the discourse on board diversity by highlighting the nuanced effects of specific diversity dimensions in the financial sector, providing valuable insights for governance practices in similar economic environments. |
| format | Article |
| id | doaj-art-70311a49ad1143c9821268392c5c218a |
| institution | Kabale University |
| issn | 2662-9984 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Springer |
| record_format | Article |
| series | Discover Sustainability |
| spelling | doaj-art-70311a49ad1143c9821268392c5c218a2025-01-26T12:10:35ZengSpringerDiscover Sustainability2662-99842025-01-016111810.1007/s43621-025-00836-3Boardroom diversity and financial performance in Palestinian banks and insurersAladdin Dwekat0Abdulmalik Taweel1Ali Salameh2Accounting Department, An-Najah National UniversityAccounting Department, An-Najah National UniversityAccounting Department, An-Najah National UniversityAbstract This study examines the impact of board diversity—precisely age, nationality, and experience—on the financial performance of 13 Palestinian banks and insurance companies listed on the Palestine Stock Exchange (PEX) from 2011 to 2022. Using a comprehensive panel data approach and controlling for endogeneity with a two-step system Generalized Method of Moments (GMM) estimator, the analysis explores how diverse board characteristics influence financial outcomes measured by ROA and ROE. Unlike previous studies focused mainly on developed markets or gender diversity, this research offers new insights into the role of board diversity in emerging economies, particularly in the Middle Eastern context. The results reveal that while age diversity negatively impacts firm performance, experience diversity positively correlates, underscoring the importance of industry-specific expertise in financial governance. Nationality diversity, however, exhibits no significant effect, suggesting that foreign representation may introduce complexity without necessarily enhancing performance. These findings contribute to Agency Theory, Upper Echelons Theory, and Resource Dependence Theory, offering practical recommendations for regulators and firms in developing markets to optimise board composition. This study expands the discourse on board diversity by highlighting the nuanced effects of specific diversity dimensions in the financial sector, providing valuable insights for governance practices in similar economic environments.https://doi.org/10.1007/s43621-025-00836-3Board diversityFinancial performanceEmerging marketsPEXFinancial institutionsCorporate governance |
| spellingShingle | Aladdin Dwekat Abdulmalik Taweel Ali Salameh Boardroom diversity and financial performance in Palestinian banks and insurers Discover Sustainability Board diversity Financial performance Emerging markets PEX Financial institutions Corporate governance |
| title | Boardroom diversity and financial performance in Palestinian banks and insurers |
| title_full | Boardroom diversity and financial performance in Palestinian banks and insurers |
| title_fullStr | Boardroom diversity and financial performance in Palestinian banks and insurers |
| title_full_unstemmed | Boardroom diversity and financial performance in Palestinian banks and insurers |
| title_short | Boardroom diversity and financial performance in Palestinian banks and insurers |
| title_sort | boardroom diversity and financial performance in palestinian banks and insurers |
| topic | Board diversity Financial performance Emerging markets PEX Financial institutions Corporate governance |
| url | https://doi.org/10.1007/s43621-025-00836-3 |
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