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Do Multiple Directorships Signal Quality? Evidence from Independent Directors
Adrian C.H. Lei; Jie Deng
2013
Source PublicationJournal of International Financial Markets, Institutions & Money
ISSN1042-4431
Abstract

This paper studies the effect of independent directors' multiple directorships on firm value and examines the countervailing effects of quality and "busyness.” Using a unique panel data set covering all Hong Kong-listed firms from 2001 to 2009, we find a strong and positive relation between the number of multiple appointments of independent directors and firm value, consistent with the quality hypothesis. The directors’ quality comes with a busyness tradeoff, however, as we find a non-linear relationship in various empirical settings. Our results are robust to a range of estimation procedures, including alternative multiple directorships measurements and instrumental variables. Overall, our empirical evidence supports increasing the minimum requirement of independent directors, even under a supply constraint of qualified directors.

KeywordQuality Multiple Board Appointments Independent Directors Busyness
Language英语
Fulltext Access
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
AffiliationUniversity of Macau
First Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Adrian C.H. Lei,Jie Deng. Do Multiple Directorships Signal Quality? Evidence from Independent Directors[J]. Journal of International Financial Markets, Institutions & Money,2013.
APA Adrian C.H. Lei,&Jie Deng.(2013).Do Multiple Directorships Signal Quality? Evidence from Independent Directors.Journal of International Financial Markets, Institutions & Money.
MLA Adrian C.H. Lei,et al."Do Multiple Directorships Signal Quality? Evidence from Independent Directors".Journal of International Financial Markets, Institutions & Money (2013).
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