Mediating role of adoption of e-banking technology innovation between top management team diversity and performance: Evidence from commercial banks in Indonesia

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Abstract

The majority of research on the relationship among the members of a top management team (TMT) directly tests the relationship between TMT diversity with performance, and research results are relatively mixed. This research is a quantitative study that aims to empirically examine the effect of TMT diversity on gender, age, and educational specialization background in the context of performance through the adoption of e-banking innovation technology. Top-level management is defined as the top executives who have a direct influence on the formulation of strategy. In the two-tier system of governance, TMT is defined as directors. The population in this study is commercial banks registered at Bank Indonesia during the period 2010-2016. The sample in this study consists of 54 banks with 324 observations conducted. In this study, observations of data used panel data sets with estimated parameters of the direct influence model utilising the GLS-RE method, while indirect effect testing used Two-Stage Least Square (TSLS). The results of gender diversity proved a positive effect on the adoption of e-banking technology innovation, while age diversity shows a negative effect on the adoption of e-banking technology innovations. The TSTS regression results show that the adoption of e-banking technology innovation is proven to mediate the relationship between age diversity and educational specialization background on performance. The results thus provide support for the upper echelons theory.

Original languageEnglish
Pages (from-to)256-278
Number of pages23
JournalInternational Journal of Innovation, Creativity and Change
Volume9
Issue number10
Publication statusPublished - 1 Jan 2019

Keywords

  • Adoption of e-banking
  • Diversity
  • Performance
  • Technology innovations
  • Top management team

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