110 © 2023 AESS Publications. All Rights Reserved. Board diversity and firm value: A study on Malaysian listed firms in manufacturing and non-manufacturing sectors Mohd Waliuddin Mohd Razali 1,2+ Pan Xin Yi 1 Nordiana Ahmad Nordin 1 Anuar Muhammad 3 Janifer Lunyai 1 1 Faculty of Economics & Business, Universiti Malaysia Sarawak, Malaysia. 1 Email: xinyi1195@gmail.com 1 Email: annordiana@unimas.my 1 Email: ljanifer@unimas.my 2 Faculty of Economics & Management, Universiti Kebangsaan Malaysia, Malaysia. 1,2 Email: walirazali@yahoo.com 3 Faculty of Accountancy, Universiti Teknologi MARA Melaka Branch, Malaysia. 3 Email: anuar843@uitm.edu.my (+ Corresponding author) ABSTRACT Article History Received: 24 February 2023 Revised: 16 May 2023 Accepted: 26 July 2023 Published: 4 August 2023 Keywords Age Corporate governance Education level Firm performance Gender Outside director. The main purpose of this study is to examine the relationship between board diversity and firm value in firms in the manufacturing and non-manufacturing sectors listed on Bursa Malaysia. The methodology of this study utilized 200 samples of Malaysian listed companies from 2014 to 2016. The board diversity variables in this study were gender, age, educational level, outsider director, and nationality. Diversity data were collected from the annual report, while all financial data, such as firm age, firm value, and firm leverage, were collected from the Eikon database. The findings show that educational level has a negative relationship with firm value, while outsider director has a positive relationship with firm value in the manufacturing sector. In the non-manufacturing sector, gender and nationality have positive relationships with firm value. In conclusion, the manufacturing industry needs outsider directors’ expertise to improve production operations. A higher level of education may lead directors to focus on fewer business aspects rather than the overall business. The non-manufacturing sector requires knowledge and skills that enhance customer satisfaction and thus increase firm value. The practical implication is that regulators such as Bursa Malaysia can enforce boardroom diversity through rules and regulations, which will affect firm value. Contribution/Originality: Unlike prior studies, this study separates the sample of firms into manufacturing and non-manufacturing sectors. Separating these sectors offers the advantage of a more focused and in-depth analysis of each industry's unique characteristics, challenges, and opportunities. The regression results prove that board diversity affects firm value differently in the two sectors. 1. INTRODUCTION The world has seen considerable transformation in every aspect, including economic, political, social, and technological changes, each of which has required businesses to become more competitive to be the best in the industry. When a company’s board of directors is diverse, its decision-making capability is stronger, and it can make decisions more effectively based on the objectives of the firm in both the short and the long term (Cox & Blake, 1991). Asian Development Policy Review ISSN(e): 2313-8343 ISSN(p): 2518-2544 DOI: 10.55493/5008.v11i2.4843 Vol. 11, No. 2, 110-122. © 2023 AESS Publications. All Rights Reserved. URL: www.aessweb.com