The Impact of Foreign Board Membership on Firm Value

Lars Oxelheim and Trond Randøy ()
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Trond Randøy: Agder University College, Postal: School of Business and Economics, Serviceboks 422, Bygg H, N-4604 Kristiansand, Norway

No 567, Working Paper Series from Research Institute of Industrial Economics

Abstract: This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). On a basis of firms with headquarters in Norway or Sweden the study indicates a significantly higher value for firms that have outsider Anglo-American board member(s), after a variety of firm-specific and corporate governance related factors have been controlled for. We argue that this superior performance reflects the fact that these companies have successfully broken away from a partly segmented domestic capital market by “importing” an Anglo-American corporate governance system. Such an “import” signals a willingness on the part of the firm to expose itself to improved corporate governance and enhances its reputation in the financial market.

Keywords: Foreign Board Membership; Corporate Governance; Board Monitoring; Cross-Listing (search for similar items in EconPapers)
JEL-codes: F36 G30 G32 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2001-12-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of Banking and Finance, 2003, pages 2369-2392.

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Journal Article: The impact of foreign board membership on firm value (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0567

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