Military directors and stock price informativeness: What's all the fuss about?

Tasawar Nawaz () and Tahseen Nawaz ()
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Tasawar Nawaz: University of Huddersfield
Tahseen Nawaz: The Islamia University of Bahawalpur

Review of Quantitative Finance and Accounting, 2024, vol. 62, issue 4, No 6, 1505-1523

Abstract: Abstract Exploiting a unique hand-built dataset, belonging to non-financial firms, operating in an emerging economy, this study, first of its kind, reports that stock prices of firms with military-experienced board of directors reflect more firm specific information after controlling for board attributes, agent heterogeneity and firm level variation. The results robust to alternative specifications of informativeness and military director proxy support the notion that military-trained directors may enhance transparency in public listed companies and encourage the incorporation of more firm-specific information into stock prices. Further analysis suggests that military directors may enfeeble CEO–board nexus and settle the directional variations at the corporate board level: military directors bring discipline in the board room that translates into rigorous CEO monitoring and improved corporate governance quality.

Keywords: Military directors; Stock price informativeness; Strategic military praetorianism; Interventionist emerging economy (search for similar items in EconPapers)
JEL-codes: G32 G34 J24 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11156-023-01240-6

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