Does board independence influence financial performance in IPO firms? The moderating role of the national business system

Alessandro Zattoni; Michael A. Witt; William Q. Judge; Till Talaulicar; Jean Jinghan Chen; Krista Lewellyn; Helen Wei Hu; Jonas Gabrielsson; Jose Luis Rivas; Sheila Puffer; Dhirendra Shukla; Felix Lopez; Emmanuel Adegbite; Yves Fassin; Sibel Yamak; Stav Fainshmidt; Hans van Ees

doi:10.1016/j.jwb.2017.04.002

Does board independence influence financial performance in IPO firms? The moderating role of the national business system

Alessandro Zattoni^*, Michael A. Witt, William Q. Judge, Till Talaulicar, Jean Jinghan Chen, Krista Lewellyn, Helen Wei Hu, Jonas Gabrielsson, Jose Luis Rivas, Sheila Puffer, Dhirendra Shukla, Felix Lopez, Emmanuel Adegbite, Yves Fassin, Sibel Yamak, Stav Fainshmidt, Hans van Ees

^*Corresponding author for this work

International Business School Suzhou

Research output: Contribution to journal › Article › peer-review

60 Citations (Scopus)

Abstract

Prior evidence suggests that board independence may enhance financial performance, but this relationship has been tested almost exclusively for Anglo-American countries. To explore the boundary conditions of this prominent governance mechanism, we examine the impact of the formal and information institutions of 18 national business systems on the board independence-financial performance relationship. Our results show that while the direct effect of independence is weak, national-level institutions significantly moderate the independence-performance relationship. Our findings suggest that the efficacy of board structures is likely to be contingent on the specific national context, but the type of legal system is insignificant.

Original language	English
Pages (from-to)	628-639
Number of pages	12
Journal	Journal of World Business
Volume	52
Issue number	5
DOIs	https://doi.org/10.1016/j.jwb.2017.04.002
Publication status	Published - Sept 2017

Keywords

Corporate governance
Financial performance
Initial public offerings
Institutions
National business systems

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10.1016/j.jwb.2017.04.002

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Zattoni, A., Witt, M. A., Judge, W. Q., Talaulicar, T., Chen, J. J., Lewellyn, K., Hu, H. W., Gabrielsson, J., Rivas, J. L., Puffer, S., Shukla, D., Lopez, F., Adegbite, E., Fassin, Y., Yamak, S., Fainshmidt, S., & van Ees, H. (2017). Does board independence influence financial performance in IPO firms? The moderating role of the national business system. Journal of World Business, 52(5), 628-639. https://doi.org/10.1016/j.jwb.2017.04.002

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title = "Does board independence influence financial performance in IPO firms? The moderating role of the national business system",

abstract = "Prior evidence suggests that board independence may enhance financial performance, but this relationship has been tested almost exclusively for Anglo-American countries. To explore the boundary conditions of this prominent governance mechanism, we examine the impact of the formal and information institutions of 18 national business systems on the board independence-financial performance relationship. Our results show that while the direct effect of independence is weak, national-level institutions significantly moderate the independence-performance relationship. Our findings suggest that the efficacy of board structures is likely to be contingent on the specific national context, but the type of legal system is insignificant.",

keywords = "Corporate governance, Financial performance, Initial public offerings, Institutions, National business systems",

author = "Alessandro Zattoni and Witt, {Michael A.} and Judge, {William Q.} and Till Talaulicar and Chen, {Jean Jinghan} and Krista Lewellyn and Hu, {Helen Wei} and Jonas Gabrielsson and Rivas, {Jose Luis} and Sheila Puffer and Dhirendra Shukla and Felix Lopez and Emmanuel Adegbite and Yves Fassin and Sibel Yamak and Stav Fainshmidt and {van Ees}, Hans",

note = "Publisher Copyright: {\textcopyright} 2017 Elsevier Inc.",

year = "2017",

month = sep,

doi = "10.1016/j.jwb.2017.04.002",

language = "English",

volume = "52",

pages = "628--639",

journal = "Journal of World Business",

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Zattoni, A, Witt, MA, Judge, WQ, Talaulicar, T, Chen, JJ, Lewellyn, K, Hu, HW, Gabrielsson, J, Rivas, JL, Puffer, S, Shukla, D, Lopez, F, Adegbite, E, Fassin, Y, Yamak, S, Fainshmidt, S & van Ees, H 2017, 'Does board independence influence financial performance in IPO firms? The moderating role of the national business system', Journal of World Business, vol. 52, no. 5, pp. 628-639. https://doi.org/10.1016/j.jwb.2017.04.002

TY - JOUR

T1 - Does board independence influence financial performance in IPO firms? The moderating role of the national business system

AU - Zattoni, Alessandro

AU - Witt, Michael A.

AU - Judge, William Q.

AU - Talaulicar, Till

AU - Chen, Jean Jinghan

AU - Lewellyn, Krista

AU - Hu, Helen Wei

AU - Gabrielsson, Jonas

AU - Rivas, Jose Luis

AU - Puffer, Sheila

AU - Shukla, Dhirendra

AU - Lopez, Felix

AU - Adegbite, Emmanuel

AU - Fassin, Yves

AU - Yamak, Sibel

AU - Fainshmidt, Stav

AU - van Ees, Hans

PY - 2017/9

Y1 - 2017/9

N2 - Prior evidence suggests that board independence may enhance financial performance, but this relationship has been tested almost exclusively for Anglo-American countries. To explore the boundary conditions of this prominent governance mechanism, we examine the impact of the formal and information institutions of 18 national business systems on the board independence-financial performance relationship. Our results show that while the direct effect of independence is weak, national-level institutions significantly moderate the independence-performance relationship. Our findings suggest that the efficacy of board structures is likely to be contingent on the specific national context, but the type of legal system is insignificant.

AB - Prior evidence suggests that board independence may enhance financial performance, but this relationship has been tested almost exclusively for Anglo-American countries. To explore the boundary conditions of this prominent governance mechanism, we examine the impact of the formal and information institutions of 18 national business systems on the board independence-financial performance relationship. Our results show that while the direct effect of independence is weak, national-level institutions significantly moderate the independence-performance relationship. Our findings suggest that the efficacy of board structures is likely to be contingent on the specific national context, but the type of legal system is insignificant.

KW - Corporate governance

KW - Financial performance

KW - Initial public offerings

KW - Institutions

KW - National business systems

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DO - 10.1016/j.jwb.2017.04.002

M3 - Article

AN - SCOPUS:85028502930

SN - 1090-9516

VL - 52

SP - 628

EP - 639

JO - Journal of World Business

JF - Journal of World Business

IS - 5

ER -

Does board independence influence financial performance in IPO firms? The moderating role of the national business system

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