The bright side of staggered boards: Evidence from labor investment efficiency

Anh-Tuan Le, Henry Hongren Huang and Trung K. Do

Journal of Contemporary Accounting and Economics, 2024, vol. 20, issue 3

Abstract: Using U.S. data from 1983 to 2015, we document that firms with staggered boards exhibit greater labor investment efficiency, measured as less abnormal net hiring, including over-investment (over-hiring and under-firing) and under-investment (under-hiring). A path analysis shows that 8.3% of the total effect of staggered boards on labor investment efficiency is explained by the positive effect of staggered boards on institutional ownership. Overall, our results support the view that staggered boards strengthen managers’ commitment to long-term shareholders’ interests, thereby encouraging managerial efforts to boost labor investment efficiency.

Keywords: Staggered board; Classified board; Labor investment efficiency; Employment decisions (search for similar items in EconPapers)
JEL-codes: G11 M51 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:20:y:2024:i:3:s1815566924000390

DOI: 10.1016/j.jcae.2024.100439

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