Independent boards and innovation

Benjamin Balsmeier, Lee Fleming and Gustavo Manso

Journal of Financial Economics, 2017, vol. 123, issue 3, 536-557

Abstract: Much research has suggested that independent boards of directors are more effective in reducing agency costs and improving firm governance. How they influence innovation is less clear. Relying on regulatory changes, we show that firms that transition to independent boards focus on more crowded and familiar areas of technology. They patent and claim more and receive more total future citations to their patents. However, the citation increase comes mainly from incremental patents in the middle of the citation distribution; the numbers of uncited and highly cited patents—arguably associated with riskier innovation strategies—do not change significantly.

Keywords: Corporate governance; Board composition; Innovation; Exploration and exploitation (search for similar items in EconPapers)
JEL-codes: G34 L14 L25 M21 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (201)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304405X16302355
Full text for ScienceDirect subscribers only

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:eee:jfinec:v:123:y:2017:i:3:p:536-557

DOI: 10.1016/j.jfineco.2016.12.005

Access Statistics for this article

Journal of Financial Economics is currently edited by G. William Schwert

More articles in Journal of Financial Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().