ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

Board Diversity and SG&A Stickiness：Evidence from Age Diversity

  • Jiwon Hyeon Seoul National University of Science and Technology

Asian Tax Journal Vol. 26 No. 2 (2025), pp. 109-134

Abstract

This paper investigates the impact of board age diversity on SG&A cost stickiness. Specifically, we examine whether boards composed of directors from diverse age groups increase or decrease SG&A stickiness. We conduct an empirical analysis using non－financial firms listed on the Korea Exchange and KOSDAQ from 2001 to 2023. Board age diversity is measured using the Blau Index and the Shannon Index. Our findings reveal that greater age diversity on the board is associated with lower SG&A stickiness. This effect is particularly pronounced in firms with high levels of free cash flow, suggesting that age－diverse boards are more effective in mitigating agency problems, which in turn reduces SG&A stickiness. The negative relationship between board age diversity and SG&A stickiness remains robust after controlling for board size, board independence, and accrual －based earnings management, and also holds when using the Propensity Score Matching (PSM) approach. This study contributes to the literature on board diversity by focusing on age as a key dimension and provides empirical evidence that age－diverse boards perform better in monitoring and controlling management.

Keywords

  • SG&A stickiness
  • board diversity
  • age diversity

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Asian Tax Journal

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