A NEW FINDING FOR CORPORATE BOARD SIZE EFFECTS: EVIDENCE FROM JAPAN

Jun Xie and Yukio Fukumoto

The Singapore Economic Review (SER), 2013, vol. 58, issue 04, 1-12

Abstract: This paper reexamines the relation between firm performance and board size using the data of Japanese companies. We find a significantly positive relation between firm performance and board size when the board size is small, but a significantly negative relation when the board size is large. Our finding is different from major empirical research such as the work by Yermack, Eisenberget al.and Coleset al.[Yermack, D (1996). Higher market valuation of companies with a small board of directors.Journal of Financial Economics, 40, 185–211; Eisenberg, T, S Sundgren and MT Wells (1998). Larger board size and decreasing firm value in small firms.Journal of Financial Economics, 48, 35–54; Coles, JL, ND Daniel and L Naveen (2008). Boards: Does one size fit all?Journal of Financial Economics, 87, 329–356].The empirical results regarding the relation between firm performance and board size might depend strongly on the characteristics of firms used in a given analysis.

Keywords: Board of directors; corporate governance; Japanese companies; firm performance; G30 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0217590813500318

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