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Board independence, corruption and innovation: some evidence on UK subsidiaries

Sena, Vania; Duygun, Meryem; Lubrano, Guiseppe; Marra, Marianna; Shaban, Mohamed


Vania Sena

Aviva Chair in Risk and Insurance

Guiseppe Lubrano

Marianna Marra

Mohamed Shaban


In this paper we test the hypothesis that independent boards can insulate a company from the detrimental impact of corruption on its performance (proxied by innovation). To this purpose, we have estimated an innovation production function that links innovation outputs to innovation input (namely investment in R&D) on a sample of manufacturing subsidiaries controlled by British multinationals and located in 30 countries. Our analysis covers the period 2005¬‐2013. After controlling for the subsidiary’s characteristics (including the ownership structure and whether the main shareholders are from Common Law countries), we find that independent boards may mitigate the negative impact of corruption on innovation as subsidiaries located in more corrupt countries and with more independent boards tend to invest more in R&D and register more valuable patents. These results still hold after controlling for the average age of the directors, the proportion of directors with no local business affiliations and government effectiveness.


Sena, V., Duygun, M., Lubrano, G., Marra, M., & Shaban, M. (2018). Board independence, corruption and innovation: some evidence on UK subsidiaries. Journal of Corporate Finance, 50, 22-43.

Journal Article Type Article
Acceptance Date Dec 22, 2017
Online Publication Date Mar 16, 2018
Publication Date Jun 1, 2018
Deposit Date Jan 18, 2018
Publicly Available Date Sep 17, 2019
Journal Journal of Corporate Finance
Print ISSN 0929-1199
Electronic ISSN 0929-1199
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 50
Pages 22-43
Keywords Board Independence, Corruption, Affiliates, Innovation.
Public URL
Publisher URL


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