TY - JOUR
T1 - Top management team diversity and firm performance
T2 - exploring a function of age
AU - Tanikawa, Tomohiko
AU - Kim, Soyeon
AU - Jung, Yuhee
PY - 2017
Y1 - 2017
N2 - Purpose: Based on socioemotional selectivity theory, the authors aimed to develop and test hypotheses that identify the direct effect of top management team (TMT) age diversity on firms’ financial performance (return on equity [ROE], return on assets [ROA]) and the interactive effect of TMT age diversity and TMT average age on firms’ financial performance. Design/methodology/approach: The paper presents results from a quantitative study of 867 TMTs in Korean manufacturing firms. Multiple hierarchical regression analysis was used to test the hypotheses. Findings: The results show that TMT age diversity had a negative and significant main effect on ROE but not on ROA. They also indicate that the negative relationship between TMT age diversity and firm performance (ROE) was attenuated when the members of TMTs were relatively older. Originality/value: First, this study extends existing TMT research, which mainly focuses on macro factors, such as industry and environment, by using micro factors, including TMT age diversity and TMT average age. Second, this paper combines and extends previous TMT studies, which have been dominated by either “property” or “tendency”, by examining the interactive effect of the distributional property (diversity) and central tendency (average) of TMT age on firms’ financial performance. Finally, this study indicates that socioemotional selectivity theory may be useful to explain the link between TMT age diversity and firms’ financial performance.
AB - Purpose: Based on socioemotional selectivity theory, the authors aimed to develop and test hypotheses that identify the direct effect of top management team (TMT) age diversity on firms’ financial performance (return on equity [ROE], return on assets [ROA]) and the interactive effect of TMT age diversity and TMT average age on firms’ financial performance. Design/methodology/approach: The paper presents results from a quantitative study of 867 TMTs in Korean manufacturing firms. Multiple hierarchical regression analysis was used to test the hypotheses. Findings: The results show that TMT age diversity had a negative and significant main effect on ROE but not on ROA. They also indicate that the negative relationship between TMT age diversity and firm performance (ROE) was attenuated when the members of TMTs were relatively older. Originality/value: First, this study extends existing TMT research, which mainly focuses on macro factors, such as industry and environment, by using micro factors, including TMT age diversity and TMT average age. Second, this paper combines and extends previous TMT studies, which have been dominated by either “property” or “tendency”, by examining the interactive effect of the distributional property (diversity) and central tendency (average) of TMT age on firms’ financial performance. Finally, this study indicates that socioemotional selectivity theory may be useful to explain the link between TMT age diversity and firms’ financial performance.
KW - Age diversity
KW - Average age
KW - Firm performance
KW - Socioemotional selectivity theory
KW - Top management team
UR - http://www.scopus.com/inward/record.url?scp=85021390424&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85021390424&partnerID=8YFLogxK
U2 - 10.1108/TPM-06-2016-0027
DO - 10.1108/TPM-06-2016-0027
M3 - Article
AN - SCOPUS:85021390424
VL - 23
SP - 156
EP - 170
JO - Team Performance Management
JF - Team Performance Management
SN - 1352-7592
IS - 3-4
ER -