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New kids on the block: The effect of Generation X directors on corporate performance

Author

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  • He, Zhaozhao
  • Miletkov, Mihail K.
  • Staneva, Viktoriya

Abstract

Generation X directors are slowly replacing Baby Boomers on U.S. corporate boards and will eventually dominate corporate boardrooms in the U.S. and around the world. We provide the first empirical evidence that the presence of Generation X directors is associated with better corporate performance. The Generation X effect is not driven by other director attributes such as sex, ethnicity, or professional expertise, and is robust to instrumental variables estimation. The result is also independent from the effect of director age which, although related to director’s generational identity, captures something fundamentally different and is controlled for in all our regressions. Finally, we document that companies with Generation X directors engage in value enhancing ESG and innovation activities and facilitate the inclusion of women on the board.

Suggested Citation

  • He, Zhaozhao & Miletkov, Mihail K. & Staneva, Viktoriya, 2023. "New kids on the block: The effect of Generation X directors on corporate performance," Journal of Empirical Finance, Elsevier, vol. 71(C), pages 66-87.
    • Handle: RePEc:eee:empfin:v:71:y:2023:i:c:p:66-87
    DOI: 10.1016/j.jempfin.2023.02.001
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    More about this item

    Keywords

    Board structure; Board diversity; Generation X; Firm performance; Female directors; Corporate social responsibility; Corporate innovation;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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