Publicação
Board structure and price informativeness
| Resumo: | We develop and test the hypothesis that stock price informativeness affects the structure of corporate boards. We find a negative relation between price informative- ness and board independence. This finding is robust to the inclusion of many firm-level controls, including firm fixed effects, and to the choice of the measure of price informativeness. Consistent with the hypothesis that price informativeness and board monitoring are substitutes, this relation is particularly strong for firms more exposed to both external and internal governance mechanisms and for firms in which firm-specific knowledge is relatively unimportant. Our results suggest that firms with more informative stock prices have less demanding board structures |
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| Autores principais: | Ferreira, Daniel |
| Outros Autores: | Ferreira, Miguel A.; Raposo, Clara |
| Assunto: | Corporate Boards Independent Directors Price Informativeness Monitoring Takeovers |
| Ano: | 2011 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | We develop and test the hypothesis that stock price informativeness affects the structure of corporate boards. We find a negative relation between price informative- ness and board independence. This finding is robust to the inclusion of many firm-level controls, including firm fixed effects, and to the choice of the measure of price informativeness. Consistent with the hypothesis that price informativeness and board monitoring are substitutes, this relation is particularly strong for firms more exposed to both external and internal governance mechanisms and for firms in which firm-specific knowledge is relatively unimportant. Our results suggest that firms with more informative stock prices have less demanding board structures |
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