Rookie independent directors and corporate fraud in China

Jiamin Chen, Yaoyao Fan and Xuezhi Zhang

Finance Research Letters, 2022, vol. 46, issue PB

Abstract: This paper examines whether rookie independent directors (RIDs) have an effect on corporate fraud in Chinese public companies. In firm-level analysis, we find that the presence of RIDs increases the likelihood of corporate fraud. In director-level analysis, we reveal that rookie independent directors are less likely to dissent using the voting records collected from company announcements. And the cost of dissension for RIDs is the higher likelihood of losing current board seats, compared with seasoned independent directors. Our results are robust to alternative variables about the existence of RIDs, the IV approach and the conditional model.

Keywords: Rookie independent directors; Corporate fraud; Voting behavior (search for similar items in EconPapers)
JEL-codes: G30 G34 J24 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pb:s1544612321004050

DOI: 10.1016/j.frl.2021.102411

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