Author's School

Olin Business School

Author's Department

Finance

Language

English (en)

Date of Award

Winter 12-15-2022

Degree Type

Dissertation

Degree Name

Doctor of Business Administration (DBA)

Chair and Committee

Todd Gormley

Committee Members

Mark Leary, Asaf Manela,

Abstract

Traditionally, government mandates and investor activism influence board diversity in the United States. This study proposes peer effects as a third important determinant of board diversity. The results suggest that companies consider the progress made by their peers when deciding their own diversity. Interestingly, companies only match the performance of their peers and will spend comparable efforts in improving their diversity according to their peer's progress. Meanwhile, the peer effect has grown stronger in recent years, and companies are more likely to track the performance of mid-level peers. The results provide evidence on a new channel that can affect board diversity and additional evidence on how peer performance affects firms' decisions.

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