Sharing a Director with a Peer

Item Type Monograph (Working Paper)
Abstract

Exploiting a unique feature of the Clayton Antitrust Act, we analyze how directors holding outside directorships at peer firms affect firm value and performance of financial firms. We find that directors serving simultaneously at horizontally-related firms have a negative impact on firm value and performance, whereas directors holding outside directorships in vertical industries, i.e., customer or supplier industries, enhance firm value and performance. Our results suggest a tradeoff between director experience and conflicts of interest. Further, stock market reactions provide evidence that investors recognize the value-diminishing effect of horizontal directors as well as the value-increasing effect of vertical directors.

Authors Schmid, Markus; Berg, Tatjana & Horsch, Philipp
Language English
Keywords Governance, Firm value, Financial institutions
Subjects business studies
HSG Classification contribution to scientific community
Refereed No
Date 2015
Series Name School of Finance Working Paper Series
Number 2015/07
Depositing User Prof. Dr. Markus Schmid
Date Deposited 05 May 2015 09:25
Last Modified 23 Aug 2016 11:21
URI: https://www.alexandria.unisg.ch/publications/240874

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Citation

Schmid, Markus; Berg, Tatjana & Horsch, Philipp: Sharing a Director with a Peer. School of Finance Working Paper Series, 2015, 2015/07.

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https://www.alexandria.unisg.ch/id/eprint/240874
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