 Boards of directors and firm leverage: Evidence from real estate investment trustsTrang Doan and Nga Q. Nguyen Journal of Corporate Finance, 2018, vol. 51, issue C, 109-124 Abstract: We re-examine the negative association between leverage and returns while also focusing on the role of boards of directors. To do so, we utilize the unique setting of real estate investment trusts (REITs), their high leverage, and the volatility that the industry experienced during the recent financial crisis. We find that during the financial crisis REIT board activity increased, especially among firms with high leverage. We also find that board activity helps mitigate the previously reported negative effect of leverage on returns during this time period. Post-crisis, we find evidence suggesting that firms with more active boards reduce their leverage if their pre-crisis leverage was high. Further, firms with more active boards have better post-crisis returns. Our findings are robust to using different measures of activity that take into account director experience in real estate and finance. Keywords: Corporate boards; Board meeting; Board committee; Director experience; Leverage; Firm performance (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:corfin:v:51:y:2018:i:c:p:109-124 DOI: 10.1016/j.jcorpfin.2018.05.007 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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