The Causal Effect of Board Size in the Performance of Closely Held Corporations


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The Causal Effect of Board Size in the Performance of Closely Held Corporations

Vis færre oplysninger Kongsted, Hans Christian en_US Meisner Nielsen, Kasper en_US Bennedsen, Morten en_US 2009-02-04T10:27:49Z 2009-02-04T10:27:49Z 2007-12-10T00:00:00Z en_US
dc.description.abstract Boards are endogenously chosen institutions determined by observable and unobservable firm characteristics. Empirical studies of large publicly traded firms have successfully controlled for observable determinants of board size and shown a robust negative relationship between board size and firm performance. The evidence on smaller closely held firms is less clear; we argue that existing work has been incomplete in analyzing the causal relationship due to weak identification strategies. Using a rich data set of almost 6,000 small and medium-sized closely held corporations we provide a causal analysis of board size effects on firm performance using a novel instrument given by the number of children of the founders of the firms. First, we find no empirical evidence of adverse board size effects when the size of the board lies in the typical range for closely held corporations of three to six directors. Second, we find a significantly negative board size effect for the minority of closely held firms that are characterized by having comparatively large boards of seven or more members and non-complex operations. en_US
dc.format.extent 40 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;2007-14 en_US
dc.title The Causal Effect of Board Size in the Performance of Closely Held Corporations en_US
dc.type wp en_US
dc.accessionstatus modt07dec10 hejamo en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Økonomisk Institut en_US
dc.contributor.departmentshort ECON en_US
dc.contributor.departmentuk Department of Economics en_US
dc.contributor.departmentukshort ECON en_US
dc.idnumber x656556063 en_US København en_US
dc.publisher.year 2007 en_US

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