Effects of Outside Directors on Firms' Investment Behavior and Performance: Evidence from a Quasi-Natural Experiment in Japan (Japanese)

Masayuki Morikawa

Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study, focusing on the recent quasi-exogenous increase in the number of outside (independent) directors among listed firms, presents empirical evidence on the impact of outside (independent) directors on investments and firm performance. Using a panel of Japanese firms, we make comparisons between listed and unlisted firms and instrumental variable estimations to examine causal relationships. According to the findings, rapid increase in the number of outside directors among listed firms does not promote positive investments and risk-taking behavior. In addition, it does not have significant impact on profitability or productivity of the firms. However, since the time horizon of the analysis is limited to up to two years after the change in the board structure, long-term impacts are beyond the scope of this study.

Pages: 24 pages
Date: 2019-05
New Economics Papers: this item is included in nep-bec and nep-eff
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/19j030.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:rdpsjp:19030

Access Statistics for this paper

More papers in Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().