Beyond the Boardroom: How Diversity and Foreign Ownership Shape Corporate Innovation?

This research examines the impact of board diversity and the moderating effects of foreign ownership on business innovation in DSE-listed manufacturing companies in Bangladesh. The study gathered data from 135 companies across 10 industry groups from 2012 to 2023. Firms’ innovation is proxied by research and development expenditures, whereas board diversity is measured in terms of gender, age, educational qualifications, and experience diversification of the board members. Employing a two-stage least squares method, the study found a positive influence of board diversity on firms’ innovation. The moderating effect of foreign ownership is also significant for firms’ innovation. The study confirms the robustness of the research findings by employing several techniques. The research provides a new perspective for the country, as there is a dearth of knowledge regarding this particular domain and will be helpful in attaining the goal of the SDGs. The practical implications of the study demonstrated that proper guidelines regarding board diversity should be introduced in Bangladesh’s Corporate Governance Guideline 2018.