 The value of independent directors: Evidence from ChinaYihan Wu and Bin Dong Emerging Markets Review, 2021, vol. 49, issue C Abstract: This paper comprehensively investigates the contribution of independent directors to Chinese listed enterprises through a unique natural experiment. Our results show that in China, independent directors who are incumbent or retired government officials can promote the performance of privately controlled listed enterprises, while other independent directors make little contribution to Chinese listed enterprises. In fact, Chinese independent directors cannot play monitoring and advising roles effectively and even exacerbate the agency problem in listed enterprises. Among them, government official independent directors, however, enable privately controlled listed enterprises to access public resources to enhance firm performance. It can be concluded that Chinese independent directors act as “vases for decoration” on boards. Even worse, government official independent directors play important roles in firms' rent-seeking activities. Our findings provide sufficient new evidence for the classic theory of independent directors and may shed light on corporate governance in other emerging economies. Keywords: Independent directors; Resignation; Market reaction; Firm value (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:49:y:2021:i:c:s1566014119304984 DOI: 10.1016/j.ememar.2020.100763 Access Statistics for this article Emerging Markets Review is currently edited by Jonathan A. Batten More articles in Emerging Markets Review from Elsevier |
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