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Does board independence influence financial performance in IPO firms? The moderating role of the national business system

Alessandro Zattoni, Michael A. Witt, William Q. Judge, Till Talaulicar, Jean Jinghan Chen, Krista Lewellyn, Helen Wei Hu, Jonas Gabrielsson (), Jose Luis Rivas, Sheila Puffer, Dhirendra Shukla, Felix Lopez, Emmanuel Adegbite, Yves Fassin, Sibel Yamak, Stav Fainshmidt and Hans van Ees

Journal of World Business, 2017, vol. 52, issue 5, 628-639

Abstract: Prior evidence suggests that board independence may enhance financial performance, but this relationship has been tested almost exclusively for Anglo-American countries. To explore the boundary conditions of this prominent governance mechanism, we examine the impact of the formal and information institutions of 18 national business systems on the board independence-financial performance relationship. Our results show that while the direct effect of independence is weak, national-level institutions significantly moderate the independence-performance relationship. Our findings suggest that the efficacy of board structures is likely to be contingent on the specific national context, but the type of legal system is insignificant.

Keywords: Corporate governance; Financial performance; Initial public offerings; Institutions; National business systems (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.jwb.2017.04.002

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