Random-Coefficients Logit Demand Estimation with Zero-Valued Market Shares

John Barrios, Pietro Bianchi () and Helena Isidro ()
Additional contact information
Pietro Bianchi: Florida International University (FIU)
Helena Isidro: ISCTE-IUL Instituto Universitario de Lisboa

No 2020-20, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We examine whether similarities in legal, sociological, and cultural characteristics between countries (country-pair homophily) affect foreign director appointments. Our results from estimating a gravity model, which includes economic and geographic country characteristics, indicate that country-pair homophily is associated with foreign director appointments to corporate boards. Country-pair homophily plays a more significant role in the foreign director market than in other cross-border exchange, such as trade, migration, and foreign investment, consistent with homophily being more important in bilateral voluntary human exchange. We use the international IFRS adoption and the gender-quota adoption in Norway as regulatory interventions to assess the role of country-pair homophily in new foreign director appointments. We find that both events led firms to appoint directors from countries that were, prior to the regulation, less institutionally, socially and culturally similar, attesting to the importance of homophily in foreign director appointments. Overall, we identify an impediment to the effectiveness of foreign director appointments driving global governance practice convergence.

Keywords: foreign directors; gravity model; corporate governance (search for similar items in EconPapers)
JEL-codes: F20 F22 G15 G34 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2020
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_202020.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bfi:wpaper:2020-20

Access Statistics for this paper

More papers in Working Papers from Becker Friedman Institute for Research In Economics Contact information at EDIRC.
Bibliographic data for series maintained by Toni Shears ( this e-mail address is bad, please contact ).