Board diversity and efficiency evaluation. Evidence from European listed manufacturing companies.

Board diversity can influence performance. Our research analyses the relationship between corporate efficiency and board diversity in European listed manufacturing companies for the year 2015 (n = 451). In particular, we investigate the effects on profitability efficiency of gender inclusion, i.e. the inclusion of women, as well as foreigners on boards as diversity management variables. In order to assess the profitability efficiency, we rely on a non-oriented, slack-based model (SBM) for Data Envelopment Analysis (DEA), and a logistic regression analysis (Logit) to identify the effect of diversity management variables. The results demonstrate that the increased presence of women on boards is associated with a higher probability for greater relative efficiency in those countries without mandatory gender regulation. The increased presence of foreigners on boards, however, is associated with a lower probability of above-average efficiency. To the best of our knowledge, this is the first combined application of a non-oriented, SMB DEA model and logistic regression.