(The) cultural determinant of board structure

Abstract

This study investigates the cultural determinant of board structure by examining the impact of the geographic divergence of gambling preference induced by religion. Using the county’s Catholic-to-Protestant ratio to proxy for gambling preference, we find that firms headquartered in gambling-prone regions tend to have smaller and less independent boards. We argue that the religiously induced risk-taking environment of the county influences the firms headquartered there, and this influence is reflected in the firm’s board structure. Thus, this study contributes to the literature on cultural determinants of board structure.