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...
| Main Authors: | , , , |
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| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2021
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/154551 |
| _version_ | 1826113669465899008 |
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| author | Chen, Shen-Syan Chen, Yan-Shing Kang, Jun-Koo Peng, Shu-Cing |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Chen, Shen-Syan Chen, Yan-Shing Kang, Jun-Koo Peng, Shu-Cing |
| author_sort | Chen, Shen-Syan |
| collection | NTU |
| 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. |
| first_indexed | 2024-10-01T03:27:00Z |
| format | Journal Article |
| id | ntu-10356/154551 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T03:27:00Z |
| publishDate | 2021 |
| record_format | dspace |
| spelling | ntu-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. |
| 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 |
| title | 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_short | Board structure, director expertise, and advisory role of outside directors |
| title_sort | board structure director expertise and advisory role of outside directors |
| topic | Business::Finance Permanent Normal Trade Relations China-Related Experience |
| url | https://hdl.handle.net/10356/154551 |
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