STEM DIRECTORS AND INVESTMENT EFFICIENCY
Amalia Rizki*, Sri Ningsih, Wulandari Fitri Ekasari, Fiona Vista Putri

Universitas Airlangga

Abstract

This research attempts to find out the relationship between STEM directors and investment efficiency. STEM directors, graduated in the fields of science, technology, engineering, and mathematics (STEM), are highly valued by the labor market for their superior technological creativity and innovation, which may generate significant benefits for long-term economic growth This research uses ordinary least squares with fixed effects, coarsened exact matching, and Heckman two-stage regression on a sample of 1.006 firm-year observations from 2016 to 2021. The result of our analysis is that there is a positive relationship between STEM CEO and investment efficiency. These OLS results are consistent with our robustness analysis using Coarsened Exact Matching (CEM) and Heckman Two-Stage Regression. By understanding this relationship, companies can gain valuable insights into how to maximize investment efficiency through leveraging the expertise and abilities of STEM directors.

Keywords: STEM directors- investment efficiency- governance- left right brain theory

Topic: Corporate governance