Directors, Outsiders and Efficiency An Analysis of How Board Characteristics Influence Firm Productivity
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چکیده
This paper investigates the relationship between firm productivity and four different board characteristics, including board size, board composition, board ownership and board leadership. Using total factor productivity (TFP) as a measure for productivity, we find an inverse association between board size and productivity and a positive relationship between board composition and productivity in a sample of 1109 firms between 1996 and 2005, when the persistence of productivity is not controlled for. When the persistence is controlled for by using difference-GMM, the impacts of board size and board composition on productivity become insignificant, while board leadership and board shareholdings become significantly associated with productivity, with the latter showing an inverted U shape.
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