Resignation of officials as independent directors and firm performance

Ren, Ting; You-zhi, Xiao; Yu, Xinguo; Yang, Hongyan; Jin, G.

doi:10.1186/s11782-020-00092-4

Cited by 8 publications

(8 citation statements)

References 74 publications

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“…Moreover, in 2013, the Chinese Communist Party implemented "Rule No. 18," which forbade incumbent government officials and those who had retired in the previous three years to hold directorships (Ren et al, 2020;Wei et al, 2020). This policy change makes it impossible to compare PB director selection before and after 2013.…”

Section: Data and Samplementioning

confidence: 99%

Attraction versus competition: A tale of two similarity effects in director selection of Chinese firms

Gao

Yoshikawa

2022

Asia Pac J Manag

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Extant research has focused primarily on the collaborative side of chair-director similarity in director selection, whereas the potential competitive side remains underexplored. Emphasizing the dual role of directors as both collaborators and competitors, as perceived by chairs, we incorporate both the similarity-attraction logic and the similarity-competition logic in director selection and develop a collaborative-competitive framework to reconcile the tension between them. Based on new director selection data from Chinese listed firms, we find that chair-director similarity in the competitive-oriented political background is negatively related to the likelihood of the director being selected—consistent with the similarity-competition logic, whereas chair-director similarity in the collaborative-oriented technological background is positively related to the likelihood of the director being selected—consistent with the similarity-attraction logic. Furthermore, we reveal how the similarity-derived effects are contingent on within-similarity heterogeneity. Our study advances research on director selection by providing a more fine-grained understanding of chair-director similarity in director selection.

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Section: Data and Samplementioning

confidence: 99%

Attraction versus competition: A tale of two similarity effects in director selection of Chinese firms

Gao

Yoshikawa

2022

Asia Pac J Manag

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“…Nevertheless, there are three theories which every so often used to justify such association: resource dependence theory (Pfeffer and Salancik, 2003; Salancik, 1979), agency theory (Jensen and Meckling, 1976) and social exchange theory (Cook and Emerson, 1978; Homans, 1961). Resource dependence theory is used in Azmi et al (2020) and Ren et al (2020); Agency theory is used in Xu et al ’s (2016) paper. Social exchange theory is applied in Liu et al (2018).…”

Section: Theoretical Review and Hypotheses Developmentmentioning

confidence: 99%

“…Previous studies have connected PCs with firms’ performance proxied by Tobin’s Q as seen in Niessen and Ruenzi (2010), Deng et al (2012), Wu et al (2012), Yang et al (2012), Muttakin et al (2015), Pérez et al (2015), Xu et al (2016), Chen et al (2017), Aldhamari et al (2020), Azmi et al (2020), Chen et al (2020), Harymawan et al (2019), Hu et al (2019), Ha and Frömmel (2020), Idris et al (2020), Joni et al (2020) and Ren et al (2020). Previous studies also use AR/CAR to measure firms’ performance, as seen in Goldman et al (2009), Amore and Bennedsen (2013).…”

Section: Theoretical Review and Hypotheses Developmentmentioning

confidence: 99%

“…PCs have been proven to have a positive association toward performance or firm value (Azmi et al , 2020; Joni et al , 2020), especially for family firms (Harymawan et al , 2019; Muttakin et al , 2015; Wati et al , 2019) and they are also associated with a lower cost of debt (Bliss et al , 2018; Khwaja and Mian, 2005; Yang et al , 2012), as well as access to government subsidies or bailout programs (Faccio et al , 2006). Politically connected officials’ resignation has also been shown to be detrimental to firms’ performance (Aldhamari et al , 2020; Chen et al , 2020; Chong et al , 2018; Proença et al , 2020; Ren et al , 2020), which further highlights the positive impact of having PCs. On the other hand, other studies have documented that PCs harm firms’ performance (Azmi et al , 2020; Ha and Frömmel, 2020; Wu et al , 2012).…”

Section: Introductionmentioning

confidence: 97%

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Are political connections beneficial or harmful toward firms’ performance? A meta-analysis approach

Prasetyo

Nasution

2021

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Purpose This study aims to reconcile conflicting empirical results from prior studies on the association between political connections (PCs) and firms’ performance. Furthermore, it investigates whether the contradictory findings were moderated by the different types of both PCs and firms’ performance measures. This study also makes a cross-country comparison of the empirical evidence to provide more insight. Design/methodology/approach This study used meta-analysis to integrate the previous studies’ findings on the association between PCs and firms’ performance and further investigated the moderators of such association. Findings The findings show that PCs have a positive association with firms’ performance. This result is apparent for both democratic and authoritarian countries, which suggests PCs’ beneficial consequences toward firms’ performance should not be disregarded in both contexts. This study also finds PCs and firms’ performance measures moderate the association between PCs and firms’ performance. Originality/value This study contributes to the stream of research that investigates the association between PCs and firms’ performance. To the best of my knowledge, it is among the first to implement statistical meta-analysis on the aforementioned literature while incorporating a cross-country comparison.

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“…Findings show both positive [Zhang, Truong, 2019] and negative [Hu et al, 2020] stock market reactions to the Rule announcement and political directors' exclusion from boards. In addition to the market reaction, the loss of political connections decreases companies' value [Chen, Zheng, Huang, 2020;Ren et al, 2020;Liu, Lin, Wu, 2018], long term financing, and government subsidies to private firms [Hu et al, 2020], and increases the risk [Ren et al, 2020]. At the same time, such directors could play a negative monitoring role and destroy value [Shi, Xu, Zhang, 2018].…”

Section: Political Directorsmentioning

confidence: 99%

Boards of directors in BRIC countries: A review of empirical studies

Kirpishchikov

López‐Iturriaga

Zavertiaeva

2021

RMJ

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The paper is aimed to analyse the most recent and relevant research on boards of directors in BRIC. Existent reviews on the board of directors do not focus on BRIC and do not consider the specifics of their corporate governance model. Therefore, the current review fills this gap by analysing 111 research papers from Scopus/Web of Science published between 2015 and 2020. Firstly, we provide a content analysis of abstracts to find the most frequent research topics and compare them to the developed countries’ studies. Secondly, based on the content analysis findings, we provide a qualitative analysis of three research directions: board composition, social capital, and board functioning, divided further into ten smaller research topics. Thirdly, we compare the research output with the developed countries’ studies and the statistics provided by the Spencer Stuart Board Indexes to analyse whether they are coherent. The results confirm the topicality of board research in BRIC and overlapping topics between the BRIC and the more developed countries. As a result, we formulate a research agenda for further studies on boards in BRIC.

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Resignation of officials as independent directors and firm performance

Cited by 8 publications

References 74 publications

Attraction versus competition: A tale of two similarity effects in director selection of Chinese firms

Attraction versus competition: A tale of two similarity effects in director selection of Chinese firms

Are political connections beneficial or harmful toward firms’ performance? A meta-analysis approach

Boards of directors in BRIC countries: A review of empirical studies

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