A Lapse of Concentration Omitted Variables, Board Structure and Firm Performance
Loading...
Links to Files
Permanent Link
Collections
Author/Creator
Author/Creator ORCID
Date
2004-10
Type of Work
Department
Program
Citation of Original Publication
Morgan Joseph Rose, A Lapse of Concentration: Omitted Variables, Board Structure and Firm Performance, https://pdfs.semanticscholar.org/82db/9b12afaeb3e45c071348de27f880ed3e1409.pdf?_ga=2.74164816.394368685.1593545506-2145448185.1585330375
Rights
This item is likely protected under Title 17 of the U.S. Copyright Law. Unless on a Creative Commons license, for uses protected by Copyright Law, contact the copyright holder or the author.
Subjects
Abstract
Previous analyses of the relationship between board structure and firm performance have not considered how that relationship is affected by external ownership concentration. This paper illustrates how, as a result of this omission, estimates of the impact of
staggered boards on firm performance have been biased downward. Including external ownership concentration also allows for the first time an examination of the interactions of that variable and board structure, permitting more informative empirical tests of
whether, and in what circumstances, effective staggered boards (ESBs) benefit shareholders. Evidence from those tests is consistent with the hypothesis that ESBs represent credible commitments on the part of shareholders not to act opportunistically,
and so enhance firm performance.