Naive independent directors, corporate governance and firm performance
This paper mainly explores the effect of naive independent directors on firm performance. Using hand-collected data on Chinese listed companies, this study finds that the proportion of naive independent directors is positively associated with firm performance, and an increased proportion of naive in...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Frontiers Media S.A.
2022-09-01
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| Series: | Frontiers in Psychology |
| Subjects: | |
| Online Access: | https://www.frontiersin.org/articles/10.3389/fpsyg.2022.984661/full |
| _version_ | 1828136937517481984 |
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| author | Gaocai Chen Xiangyu Chen Peng Wan |
| author_facet | Gaocai Chen Xiangyu Chen Peng Wan |
| author_sort | Gaocai Chen |
| collection | DOAJ |
| description | This paper mainly explores the effect of naive independent directors on firm performance. Using hand-collected data on Chinese listed companies, this study finds that the proportion of naive independent directors is positively associated with firm performance, and an increased proportion of naive independent directors reduce the probability of tunneling of controlling shareholders and financial distress. The findings are robust after using alternative explanatory variables and retro-causality tests. Furthermore, the relation between naive independent directors and firm performance mainly existed in firms with lower shareholdings of the largest shareholder and firms with lower financial leverage. Moreover, this paper finds that firm size, corporate ownership type, and equity balance degree are important factors affecting the appointment of naive independent directors. This paper offers further empirical evidence to the existing research related to naive independent directors and provides an effective way to improve corporate board governance. |
| first_indexed | 2024-04-11T18:11:40Z |
| format | Article |
| id | doaj.art-3ee16e2b28004b70957f9705007de869 |
| institution | Directory Open Access Journal |
| issn | 1664-1078 |
| language | English |
| last_indexed | 2024-04-11T18:11:40Z |
| publishDate | 2022-09-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Psychology |
| spelling | doaj.art-3ee16e2b28004b70957f9705007de8692022-12-22T04:10:04ZengFrontiers Media S.A.Frontiers in Psychology1664-10782022-09-011310.3389/fpsyg.2022.984661984661Naive independent directors, corporate governance and firm performanceGaocai Chen0Xiangyu Chen1Peng Wan2School of Business, Anhui University, Hefei, ChinaSchool of Accounting, Zhejiang University of Finance and Economics, Hangzhou, ChinaSchool of Accounting, Zhejiang Gongshang University, Hangzhou, ChinaThis paper mainly explores the effect of naive independent directors on firm performance. Using hand-collected data on Chinese listed companies, this study finds that the proportion of naive independent directors is positively associated with firm performance, and an increased proportion of naive independent directors reduce the probability of tunneling of controlling shareholders and financial distress. The findings are robust after using alternative explanatory variables and retro-causality tests. Furthermore, the relation between naive independent directors and firm performance mainly existed in firms with lower shareholdings of the largest shareholder and firms with lower financial leverage. Moreover, this paper finds that firm size, corporate ownership type, and equity balance degree are important factors affecting the appointment of naive independent directors. This paper offers further empirical evidence to the existing research related to naive independent directors and provides an effective way to improve corporate board governance.https://www.frontiersin.org/articles/10.3389/fpsyg.2022.984661/fullnaive independent directorscorporate governancefirm performancetunnelingChina |
| spellingShingle | Gaocai Chen Xiangyu Chen Peng Wan Naive independent directors, corporate governance and firm performance Frontiers in Psychology naive independent directors corporate governance firm performance tunneling China |
| title | Naive independent directors, corporate governance and firm performance |
| title_full | Naive independent directors, corporate governance and firm performance |
| title_fullStr | Naive independent directors, corporate governance and firm performance |
| title_full_unstemmed | Naive independent directors, corporate governance and firm performance |
| title_short | Naive independent directors, corporate governance and firm performance |
| title_sort | naive independent directors corporate governance and firm performance |
| topic | naive independent directors corporate governance firm performance tunneling China |
| url | https://www.frontiersin.org/articles/10.3389/fpsyg.2022.984661/full |
| work_keys_str_mv | AT gaocaichen naiveindependentdirectorscorporategovernanceandfirmperformance AT xiangyuchen naiveindependentdirectorscorporategovernanceandfirmperformance AT pengwan naiveindependentdirectorscorporategovernanceandfirmperformance |