Business Professors in the Boardroom: Can they walk-the-talk?

•Business Professor Independent Directors (BPIDs) enhance minority shareholder protections from the controlling shareholder-manager coalition at the cost of firm investment efficiency.•These findings are in line with BPIDs’ high ethical standards and reputational concerns but lack of industry experi...

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Bibliographic Details
Published inFinance research letters Vol. 39; p. 101590
Main Authors Huang, Wei, Teklay, Belaynesh
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.03.2021
Subjects
Academic independent directors
Agency costs
China
Investment
Agency costs
Academic independent directors
G3
China
M4
Investment
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Summary:•Business Professor Independent Directors (BPIDs) enhance minority shareholder protections from the controlling shareholder-manager coalition at the cost of firm investment efficiency.•These findings are in line with BPIDs’ high ethical standards and reputational concerns but lack of industry experience. This paper explicitly tests the influences of Business Professor Independent Directors (BPIDs) on firm agency costs and investment efficiency using the Chinese setting. We reveal that BPIDs enhance minority shareholder protections from the controlling shareholder-manager coalition at the cost of firm investment efficiency. These findings are in line with BPIDs’ high ethical standards and reputational concerns but lack of industry experience.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2020.101590