A Lapse of Concentration Omitted Variables, Board Structure and Firm Performance

Thumbnail Image

Files

9b12afaeb3e45c071348de27f880ed3e1409.pdf (306.33 KB)

Links to Files

Permanent Link

http://hdl.handle.net/11603/19090

Collections

UMBC Economics Department

Author/Creator

Author/Creator ORCID

Date

2004-10

Type of Work

conference papers and proceedings preprints
Text

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.