Board diversity and firm risk-taking in the tourism sector: Moderating effects of board independence, CEO duality, and free cash flows

• Ozgur Ozdemir ^[2] ; Ezgi Erkmen ^[1] ; Fatemeh Binesh ^[2]
  1. [1] Boğaziçi University

     Boğaziçi University

     Turquía

     
  2. [2] University of Nevada, Las Vegas

     University of Nevada, Las Vegas

     Estados Unidos

     
• Localización: Tourism economics: the business and finance of tourism and recreation, ISSN 1354-8166, Vol. 28, Nº. 7, 2022, págs. 1782-1804
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • This study examines the effect of board diversity on risk-taking for tourism firms and analyzes the moderating effect of board independence, CEO duality, and free cash flows in this proposed relationship. Using a composite index of board diversity and a sample of tourism firms from the US hotel, restaurant, and airline industries, we find that greater board diversity leads to lower risk-taking, measured in standard deviation of return on assets. Moreover, we report that the risk-reduction effect of board diversity is more profound when tourism firms have less board independence and less free cash flows for investments. When board diversity is decomposed into relation-oriented and task-oriented diversity attributes, we find that only the task-oriented diversity is influential in reducing firm risk-taking for tourism firms. Akin to main analysis, the board independence and free cash flows are significant moderators of the relationship between task-oriented diversity and firm risk-taking.