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The comparative and interactive effects of political, academic and financial directors

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  • Liu, Yu

Abstract

This study considers directors with political, academic, or financial (PAF) backgrounds and examines their comparative strengths/weaknesses and their interactive effects. Academic directors are associated with better firm performance, stronger monitoring effects, enhanced innovation results, and easier access to finance. Political and financial directors are likely selected for their resource-providing capacity. The relationship between PAF directors and firm activities varies systematically across industries and over time. More importantly, PAF directors are not independent from one another. A significant presence of political directors weakens the monitoring and performance effects of academic directors.

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  • Liu, Yu, 2020. "The comparative and interactive effects of political, academic and financial directors," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 546-565.
    • Handle: RePEc:eee:reveco:v:70:y:2020:i:c:p:546-565
    DOI: 10.1016/j.iref.2020.08.003
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    Cited by:

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    2. Liu, Yu & Xu, Jian, 2022. "Residual state ownership, foreign ownership and firms' financing patterns," Emerging Markets Review, Elsevier, vol. 51(PA).

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    More about this item

    Keywords

    Political directors; Academic directors; Financial directors; Firm performance; Monitoring; Advising; Resource providing; Interactions;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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