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Title: Do outside directors with government experience create value?
Authors: Kang, Jun-Koo
Zhang, Le
Keywords: Firm Value
Government Director
Issue Date: 2018
Source: Kang, J.-K., & Zhang, L. (2018). Do outside directors with government experience create value?.Financial Management, 47(2), 209-251. doi:10.1111/fima.12190
Series/Report no.: Financial Management
Abstract: We examine whether outside directors with government experience add value to their firms. We find that government directors are more likely to miss board meetings and that their appointment announcements are greeted more negatively. Firms with government directors also experience poorer operating performance and more negative merger announcement returns, although their mergers are less likely to be challenged by antitrust authorities. These adverse valuation effects are largely alleviated when firms have large government sales, when they operate in regulated industries, or when government directors are politically connected. Using close gubernatorial election outcomes as a natural experiment and an instrumental variables approach to control for endogeneity bias do not change the results.
ISSN: 0046-3892
DOI: 10.1111/fima.12190
Rights: © 2018 Financial Management Association International. All rights reserved. This paper was published by Wiley in Financial Management and is made available with permission of Financial Management Association International.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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