Does Board Independence Increase Firm Value? Evidence from Closed-End Funds

Matthew E. Souther

Journal of Financial and Quantitative Analysis, 2021, vol. 56, issue 1, 313-336

Abstract: Researchers disagree about the impact of board independence on firm value. The disagreement generally stems from the endogenous nature of board appointments. I add new evidence to this discussion by using a sample of closed-end funds to document the value-enhancing effects of independent boards. Using cross-sectional, difference-in-differences, and instrumental variables techniques, I address these endogeneity concerns and find consistent evidence that board independence is associated with higher firm value.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jfinqa:v:56:y:2021:i:1:p:313-336_11

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