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

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

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 (Whitley, 1999) 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.

Citation

Zattoni, A., Witt, M. A., Judge, W. Q., Talaulicar, T., Chen, J. J., Lewellyn, K., …Ees, H. V. (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

• Journal Article Type: Article
• Acceptance Date: Apr 21, 2017
• Online Publication Date: Aug 31, 2017
• Publication Date: Sep 29, 2017
• Deposit Date: Sep 11, 2018
• Publicly Available Date: Mar 1, 2019
• Journal: Journal of World Business
• Print ISSN: 1090-9516
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 52
• Issue: 5
• Pages: 628-639
• DOI: https://doi.org/10.1016/j.jwb.2017.04.002
• Keywords: Corporate governance; Financial performance; Initial public offerings; Institutions; National Business Systems
• Public URL: https://nottingham-repository.worktribe.com/output/1069323
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1090951617303681