Independent directors’ dissensions and firm value

Wonseok Choi, Monika K. Rabarison and Bin Wang

The Quarterly Review of Economics and Finance, 2021, vol. 80, issue C, 258-271

Abstract: Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.

Keywords: Corporate governance; Independent; Board of directors; Dissension; Firm value (search for similar items in EconPapers)
JEL-codes: G30 G38 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:80:y:2021:i:c:p:258-271

DOI: 10.1016/j.qref.2021.02.003

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