Are multiple directorships beneficial in East Asia?
We posit that the benefits and costs of multiple directorships are conditional on firm characteristics. We find firm valuation is positively associated with multiple directorships in (i) firms with high advising needs and (ii) firms with high external financing needs. These beneficial effects of multiple...
Saved in:
| Main Authors: | , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
2013
|
| Online Access: | https://hdl.handle.net/10356/97981 http://hdl.handle.net/10220/12283 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | We posit that the benefits and costs of multiple directorships are conditional on
firm characteristics. We find firm valuation is positively associated with
multiple directorships in (i) firms with high advising needs and (ii) firms with
high external financing needs. These beneficial effects of multiple directorships
are generally stronger in countries with weak shareholder rights and in firms
that are widely held. However, when controlling shareholder hold high votingrights
to cash-flow rights, multiple directorships reduce firm valuation,
especially in countries with weak shareholder rights and in closely held firms.
As multiple directorships increases, cash holdings (capital expenditures)
contribute less to shareholder value. The negative association between value
of cash (capital expenditure) and busy boards is mitigated in firms with (i) high
advising needs, (ii) high external financing needs and (iii) less entrenched
ownership structures. |
|---|