Research On The Impact Of Board Diversity On The Pricing Efficiency Of Capital Market

As the company’s business decision-making body,the board of directors is the key element of corporate governance.In recent years,diversified board of directors has gradually been favored by enterprises.On the one hand,it can improve the knowledge,experience and resources of the board of directors,make the team work more effectively,make more effective decisions and play a more comprehensive supervision function;On the other hand,it can be transmitted to investors as characteristic information,so that investors can have more basis when investing,so as to make more rational decisions.Therefore,the research on the board diversity is of certain significance.Capital market pricing efficiency is an important factor reflecting the effectiveness of the capital market.This paper combines the two concepts and focuses on the supervision function.Based on the research of Gennaro bernile(2018),firstly,this paper analyzes the impact of diversified board of directors on the pricing efficiency of capital market by using Upper Echelons Theory,Information Asymmetry Theory and others.Secondly,it combs the relevant literature on the board diversity and the pricing efficiency of the capital market.Then,it selects the data from2008 to 2020,refers to the previous literature,draws lessons from the team diversity research in organizational behavior,measures the diversity of the board of directors from the statistical and cognitive levels,measures the pricing efficiency of the capital market with the synchronization of stock prices,establishes a regression model,and analyzes the relationship between them.The relationship between the board diversity and the information efficiency of the capital market is further studied by grouping the quality of information disclosure,the attention of analysts,the quality of audit and the nature of equity.This paper draws the following conclusions: the higher board diversity makes the lower the synchronization of stock prices.When the board diversity is high,its supervision ability is stronger,so that the management can disclose more characteristic information to reduce the synchronization of stock price.And this relationship is more significant when the quality of information disclosure is poor,analysts pay more attention,the statements are audited by non four major accounting firms,and the nature of equity is state-owned enterprises.In order to make the conclusion more accurate,this paper adopts three methods—replacing the explained variables,propensity score matching(PSM),Henckman two-stage model and IV to test the robustness,which proves once again that the board diversity can improve the pricing efficiency of the capital market.This paper enriches the research of the board of directors and provides new angel of view for improving corporate governance and reducing the synchronization of stock prices.The research conclusions have certain reference significance for listed companies,external regulators and investors.For listed companies,when building the board of directors and selecting members,we can pay more attention to their characteristics,promote the diversification and make the team more effective,so as to reduce the synchronization of stock prices;For investors,before making investment decisions,they can also regards diversity of the board of directors as an indicator to measure corporate governance and development potential,so as to make more rational decisions;For external regulators,this paper has reference significance for them to formulate relevant policies of the board of directors,construct indicators to evaluate the governance ability of the board of directors,so as to guide the healthy development of the capital market.