Board independence and innovation

• Autor(es): Coelho, Mariana Campos Carvalho
• Data: 2015
• Identificador Persistente: http://hdl.handle.net/10362/15344
• Origem: Repositório Institucional da UNL
• Assunto(s): Innovation; Corporate governance; Board independence; Patents
• Tipo de Documento: Dissertação de mestrado
• Idioma: Inglês
• Orientador(es): Ferreira, Miguel
• Contribuidor(es): RUN

Descrição

Legislation introduced in the U.S. in 2002/2003 significantly changed board composition of public firms by imposing a 50% independent directors’ ratio. Research on the effect of independent directors is not consensual, implying that this exogenous shock is a unique opportunity to study their importance. This study answers the question of whether or not independent directors can effectively mitigate agency conflicts between shareholders and the management, having a positive impact on the choice of successful R&D projects. We find that an increase of board independence has a positive impact on patent counts. Hence, the results support that independent directors truly spur innovation and risk taking.

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