The appointment of celebrities to corporate boards in China: sword or shield?

Jin-hui Luo, Zeyue Huang and Zhiru Lin

Applied Economics Letters, 2017, vol. 24, issue 14, 1001-1004

Abstract: This study examines whether reputation mechanism works for celebrity independent directors in China. We find that firms with celebrity independent directors experience higher multiple agency costs and worse performance, indicating that managers and/or large shareholders take celebrity-independent directors as a shield for facilitating grabbing private benefits. In addition, this effect varies between state-owned enterprises and non-state-owned enterprises.

Date: 2017
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DOI: 10.1080/13504851.2016.1245835

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