Board Governance and Investment Sensitivity to Stock Price: International Evidence

Abstract This article examines the effect of board governance on investment efficiency. I use staggered enactment reforms in 41 countries as a shock to structure that exogenously improves quality oversight managers. find investment-Q sensitivity by roughly half post-reform. is more pronounced for firms are exposed or when external mechanisms less likely discipline These findings suggest increased strengthens managers’ incentives make decisions line with their firms’ growth opportunities.