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Independent directors’ dissensions and firm value

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  • Choi, Wonseok
  • Rabarison, Monika K.
  • Wang, Bin

Abstract

Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.

Suggested Citation

  • Choi, Wonseok & Rabarison, Monika K. & Wang, Bin, 2021. "Independent directors’ dissensions and firm value," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 258-271.
    • Handle: RePEc:eee:quaeco:v:80:y:2021:i:c:p:258-271
    DOI: 10.1016/j.qref.2021.02.003
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    More about this item

    Keywords

    Corporate governance; Independent; Board of directors; Dissension; Firm value;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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