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East Asian Economic Review Vol. 13, No. 1, 2009. pp. 135-156.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2009.13.1.199

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The Effect of Board Characteristics on Firm Performance in Japan

Author

Oona Cha

Chung-Ang University;Kyungpook National University

ocha@cau.ac.kr

Taehun Jung

taehunjung@gmail.com
Creative Commons Attribution License

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

This paper analyzes the effect of similarity among board members on firm performance in Japanese manufacturing firms. The similarity measures regarding age and educational background of individual directors were used to predict firm performance. The analyses revealed that similarity of age among board members had adverse effects on firm performance. In addition, greater variation in educational background among board members predicted better firm performance. It seems that homogeneity among board members in terms of age and education can affect the firm negatively by impeding exchange of diverse ideas. These findings emphasize that promoting diversity in terms of age and education in the board of directors is crucial for firm performance.

JEL classification: H32, G30

Keywords

Board of Directors, Similarity, Firm Performance

Language

Korean

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