Fast Tracks to Boardrooms: Director Supply and Board Appointments

Audinga Baltrunaite and Egle Karmaziene

No 15828, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine how the size of the labor market for corporate directors impacts board appointments in Italian private firms. Using the high-speed railway expansion as an exogenous shock to costs of serving on boards, we find that an increase in the supply of non-local directors leads to a higher degree of positive assortative matching between firms and directors. High-quality firms improve their board quality at the expense of low-quality firms. The director-firm matching effects are muted among companies with owners acting as board directors. This finding highlights the importance of director entrenchment in the corporate governance of private firms.

Keywords: Director supply; Board of directors; Match quality (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2021-02
New Economics Papers: this item is included in nep-bec
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Citations: View citations in EconPapers (4)

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Journal Article: Fast tracks to boardrooms: Director supply and board appointments (2024)
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