 Did outside directors’ firm-specific accumulated knowledge benefit the firm’s stock performance during COVID-19?Dharmendra Naidu and
Kumari Ranjeeni
Australian Journal of Management, 2024, vol. 49, issue 4, 605-635 Abstract: We examine whether outside directors’ firm-specific accumulated knowledge in the forms of human and internal social capital benefitted the firm during COVID-19. Using a sample of 754 US firms during the COVID-19 collapse period, we find an inverted U-shaped relation between outside directors’ average board tenure and cumulative excess stock returns. Our result suggests that firms experienced optimal cumulative excess stock returns during COVID-19 when outside directors’ average board tenure is 10 years. We also find that the curvilinear relation is profound for outside directors with more internal social capital, suggesting that outside directors’ internal social capital plays a prominent role in enhancing board effectiveness during a crisis. Furthermore, we use several robustness checks to confirm the results. JEL Classification: D83, G30, G34, M41 Keywords: Accumulated knowledge; COVID-19; director tenure; excess stock returns; global crisis; social capital (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:49:y:2024:i:4:p:605-635 DOI: 10.1177/03128962231166831 Access Statistics for this article More articles in Australian Journal of Management from Australian School of Business |
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