Board structure, director expertise, and advisory role of outside directors

We investigate how a shock to corporate demand for experienced directors (i.e., U.S. Congress’ grant of Permanent Normal Trade Relations status to China in 2000) affects U.S. firms’ board structure and board advisory role. We find that firms appoint more outside directors with China-related experien...

Full description

Saved in:
Bibliographic Details
Main Authors: Chen, Shen-Syan, Chen, Yan-Shing, Kang, Jun-Koo, Peng, Shu-Cing
Other Authors: Nanyang Business School
Format: Article
Language:English
Published: 2021
Subjects:
Online Access:https://hdl.handle.net/10356/154551
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Nanyang Technological University
Language: English
id sg-ntu-dr.10356-154551
record_format dspace
spelling sg-ntu-dr.10356-1545512023-05-19T07:31:16Z Board structure, director expertise, and advisory role of outside directors Chen, Shen-Syan Chen, Yan-Shing Kang, Jun-Koo Peng, Shu-Cing Nanyang Business School Business::Finance Permanent Normal Trade Relations China-Related Experience We investigate how a shock to corporate demand for experienced directors (i.e., U.S. Congress’ grant of Permanent Normal Trade Relations status to China in 2000) affects U.S. firms’ board structure and board advisory role. We find that firms appoint more outside directors with China-related experience after the grant. Firms with such directors realize higher returns around announcements of investments involving Chinese firms and better post-deal operating performance, particularly when these directors reside in the U.S. The appointment of directors with China experience is also greeted more positively by the stock market and they gain more board seats after the grant. We are especially grateful to the referee, Michael Weisbach, for his valuable advice. We also thank Alexander Ljungqvist, Jerry Parwada, John Wei, William Schwert (editor), and seminar participants at Nanyang Technological University, National Central University, National Chiao Tung University, National Tsing Hua University, and Yuan Ze University for their useful comments. We are also grateful to participants at the 2018 Doctoral Symposium of National Taiwan University. Sheng-Syan Chen, Yan-Shing Chen, and Shu-Cing Peng gratefully acknowledge financial support from E.SUN Commercial Bank and the Ministry of Science and Technology in Taiwan (MOST 106–2917-I-002–021), respectively. All errors are our own. 2021-12-28T04:22:50Z 2021-12-28T04:22:50Z 2020 Journal Article Chen, S., Chen, Y., Kang, J. & Peng, S. (2020). Board structure, director expertise, and advisory role of outside directors. Journal of Financial Economics, 138(2), 483-503. https://dx.doi.org/10.1016/j.jfineco.2020.05.008 0304-405X https://hdl.handle.net/10356/154551 10.1016/j.jfineco.2020.05.008 2-s2.0-85086102994 2 138 483 503 en Journal of Financial Economics © 2020 Elsevier B.V. All rights reserved.
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic Business::Finance
Permanent Normal Trade Relations
China-Related Experience
spellingShingle Business::Finance
Permanent Normal Trade Relations
China-Related Experience
Chen, Shen-Syan
Chen, Yan-Shing
Kang, Jun-Koo
Peng, Shu-Cing
Board structure, director expertise, and advisory role of outside directors
description We investigate how a shock to corporate demand for experienced directors (i.e., U.S. Congress’ grant of Permanent Normal Trade Relations status to China in 2000) affects U.S. firms’ board structure and board advisory role. We find that firms appoint more outside directors with China-related experience after the grant. Firms with such directors realize higher returns around announcements of investments involving Chinese firms and better post-deal operating performance, particularly when these directors reside in the U.S. The appointment of directors with China experience is also greeted more positively by the stock market and they gain more board seats after the grant.
author2 Nanyang Business School
author_facet Nanyang Business School
Chen, Shen-Syan
Chen, Yan-Shing
Kang, Jun-Koo
Peng, Shu-Cing
format Article
author Chen, Shen-Syan
Chen, Yan-Shing
Kang, Jun-Koo
Peng, Shu-Cing
author_sort Chen, Shen-Syan
title Board structure, director expertise, and advisory role of outside directors
title_short Board structure, director expertise, and advisory role of outside directors
title_full Board structure, director expertise, and advisory role of outside directors
title_fullStr Board structure, director expertise, and advisory role of outside directors
title_full_unstemmed Board structure, director expertise, and advisory role of outside directors
title_sort board structure, director expertise, and advisory role of outside directors
publishDate 2021
url https://hdl.handle.net/10356/154551
_version_ 1772825805146030080