| Item Type |
Conference or Workshop Item
(Paper)
|
| Abstract |
We analyze the valuation effect of board industry experience and channels through which industry experience of outside directors affects firm value. Our analysis shows that firms with more experienced outside directors are valued at a premium compared to firms with less experienced outside directors. Additional analyses, including a quasi-experimental setting based on director deaths, mitigate endogeneity concerns. Further tests show that the board industry experience-firm value relation is more pronounced for firms with larger investment programs, larger cash reserves, and during crises. In contrast, it is weaker in more dynamic industries where the value of previously acquired experience is likely to be diminished. We also provide some evidence that corporate governance problems in firms, in particular entrenched CEOs, and a limited supply of industry experts prevent firms from appointing more industry experts to their boards, even though this would be value-increasing. Overall, our findings are consistent with board industry experience being a valuable corporate governance mechanism. |
| Authors |
Drobetz, Wolfgang; von Meyerinck, Felix; Oesch, David & Schmid, Markus |
| Language |
English |
| Subjects |
business studies |
| HSG Classification |
contribution to scientific community |
| Refereed |
No |
| Date |
16 December 2015 |
| Event Title |
28th Australasian Finance and Banking Conference (AFBC) |
| Event Location |
Sydney |
| Event Dates |
16.-18.12.2015 |
| Publisher DOI |
https://doi.org/10.2139/ssrn.2256477 |
| Depositing User |
Prof. Dr. Felix von Meyerinck
|
| Date Deposited |
13 Jan 2016 10:36 |
| Last Modified |
20 Mar 2023 01:24 |
| URI: |
https://www.alexandria.unisg.ch/publications/246668 |
Industry Expert Directors
