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 Eurospean 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.