Does board independence influence financial performance in IPO firms? The moderating role of the national business system

Zattoni, Alessandro, Witt, Michael A., Judge, William Q., Talaulicar, Till, Chen, Jean Jinghan, Lewellyn, Krista, Hu, Helen Wei, Gabrielsson, Jonas, Rivas, Jose Luis, Puffer, Sheila, Shukla, Dhirendra, Lopez, Felix, Adegbite, Emmanuel, Fassin, Yves, Yamak, Sibel, Fainshmidt, Stav, and van Ees, Hans (2017) Does board independence influence financial performance in IPO firms? The moderating role of the national business system. Journal of World Business, 52 (5). pp. 628-639.

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Abstract

Prior evidence suggests that board independence may enhance financial performance, but this relationship has been tested almost exclusively for Anglo-American countries. To explore the boundary conditions of this prominent governance mechanism, we examine the impact of the formal and information institutions of 18 national business systems on the board independence-financial performance relationship. Our results show that while the direct effect of independence is weak, national-level institutions significantly moderate the independence-performance relationship. Our findings suggest that the efficacy of board structures is likely to be contingent on the specific national context, but the type of legal system is insignificant.

Item ID: 54455
Item Type: Article (Research - C1)
ISSN: 1878-5573
Keywords: corporate governance; financial performance; initial public offerings; institutions; national business systems
Date Deposited: 05 Jul 2018 00:24
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement @ 100%
SEO Codes: 94 LAW, POLITICS AND COMMUNITY SERVICES > 9402 Government and Politics > 940203 Political Systems @ 100%
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