Board independence and operating performance: Analysis on (French) company and individual data

Sandra Cavaco (), Edouard Challe, Patricia Crifo, Antoine Reberioux and Gwenael Roudaut
Additional contact information
Sandra Cavaco: LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - UP2 - Université Panthéon-Assas
Gwenael Roudaut: X - École polytechnique - IP Paris - Institut Polytechnique de Paris

Post-Print from HAL

Abstract: This article studies the relationship between board independence and firm operating performance in French listed companies. We take advantage of an original database, with a time-series dimension that can be used to mitigate heterogeneity and dynamic endogeneity issues. In addition, this database can be disaggregated at the individual (director) level. This design enables us to introduce firm fixed effects and individual fixed effects in firm performance equations, thereby controlling for heterogeneity at the firm and individual levels. Our main result is to document a significant negative relationship between independence and accounting performance. This result suggests that, in the French context, the costs of independence (i.e. the informational gap supported by independent directors compared to insiders and affiliated directors) outweigh the benefits of independence (i.e. the reduction in agency costs).

Keywords: independent directors; firm performance; Board structure; GMM estimator; individual heterogeneity (search for similar items in EconPapers)
Date: 2016
Note: View the original document on HAL open archive server: https://hal.parisnanterre.fr/hal-01386049v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published in Applied Economics, 2016, 48 (52), pp.5093 - 5105. ⟨10.1080/00036846.2016.1170936⟩

Downloads: (external link)
https://hal.parisnanterre.fr/hal-01386049v1/document (application/pdf)

Related works:
Journal Article: Board independence and operating performance: analysis on (French) company and individual data (2016)
Working Paper: Board independence and operating performance: Analysis on (French) company and individual data (2014)
Working Paper: Board independence and operating performance: Analysis on (French) company and individual data (2014)
Working Paper: Board independence and operating performance: Analysis on (French) company and individual data (2014)
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:hal:journl:hal-01386049

DOI: 10.1080/00036846.2016.1170936

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().