Advanced Search
MyIDEAS: Login to save this article or follow this journal

Board composition, political connections, and performance in state-owned enterprises

Contents:

Author Info

  • Anna Menozzi
  • María Gutiérrez Urtiaga
  • Davide Vannoni

Abstract

This article analyses the effects of board composition on the behavior of a sample of 114 Italian local public utilities, for which information about 1630 directors during 1994--2004 has been collected. This period is particularly interesting because of the legal changes that forced many firms to alter their juridical form and accommodated the entrance of private investors. We investigate whether board size and/or board composition do affect decisions about employment and how they ultimately impact performance. Our main findings indicate that politically connected directors, who dominate boards of directors in Italian public utilities, exert a positive and significant effect on employment, and have a negative impact on performance. Copyright 2012 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1093/icc/dtr055
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Oxford University Press in its journal Industrial and Corporate Change.

Volume (Year): 21 (2012)
Issue (Month): 3 (June)
Pages: 671-698

as in new window
Handle: RePEc:oup:indcch:v:21:y:2012:i:3:p:671-698

Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Email:
Web page: http://icc.oupjournals.org/

Order Information:
Web: http://www.oup.co.uk/journals

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W, 1996. "A Theory of Privatisation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(435), pages 309-19, March.
  2. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers, Institute for Fiscal Studies W95/17, Institute for Fiscal Studies.
  3. Becht, Marco & Bolton, Patrick & Roell, Ailsa, 2003. "Corporate governance and control," Handbook of the Economics of Finance, Elsevier, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 1, pages 1-109 Elsevier.
  4. Boubakri, Narjess & Cosset, Jean-Claude & Saffar, Walid, 2008. "Political connections of newly privatized firms," Journal of Corporate Finance, Elsevier, Elsevier, vol. 14(5), pages 654-673, December.
  5. Niessen, Alexandra & Ruenzi, Stefan, 2009. "Political connectedness and firm performance: Evidence from Germany," CFR Working Papers, University of Cologne, Centre for Financial Research (CFR) 07-15, University of Cologne, Centre for Financial Research (CFR).
  6. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," NBER Working Papers 5744, National Bureau of Economic Research, Inc.
  7. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2008. "Boards: Does one size fit all," Journal of Financial Economics, Elsevier, Elsevier, vol. 87(2), pages 329-356, February.
  8. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  9. Linck, James S. & Netter, Jeffry M. & Yang, Tina, 2008. "The determinants of board structure," Journal of Financial Economics, Elsevier, Elsevier, vol. 87(2), pages 308-328, February.
  10. Oliver Hart, 2002. "Incomplete Contracts and Public Ownership: Remarks, and an Application to Public-Private Partnerships," The Centre for Market and Public Organisation, Department of Economics, University of Bristol, UK 02/061, Department of Economics, University of Bristol, UK.
  11. Boone, Audra L. & Casares Field, Laura & Karpoff, Jonathan M. & Raheja, Charu G., 2007. "The determinants of corporate board size and composition: An empirical analysis," Journal of Financial Economics, Elsevier, Elsevier, vol. 85(1), pages 66-101, July.
  12. Piacenza, Massimiliano & Vannoni, Davide, 2004. "Choosing among alternative cost function specifications: an application to Italian multi-utilities," Economics Letters, Elsevier, Elsevier, vol. 82(3), pages 415-422, March.
  13. Klein, April, 1998. "Firm Performance and Board Committee Structure," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 41(1), pages 275-303, April.
  14. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, Elsevier, vol. 126(1), pages 25-51, May.
  15. Cambini Carlo & Filippini Massimo & Piacenza Massimiliano & Vannoni Davide, 2011. "Corporatization and Firm Performance: Evidence from Publicly-Provided Local Utilities," Review of Law & Economics, De Gruyter, De Gruyter, vol. 7(1), pages 191-213, July.
  16. Mara Faccio, 2006. "Politically Connected Firms," American Economic Review, American Economic Association, American Economic Association, vol. 96(1), pages 369-386, March.
  17. Jain, Satish (ed.), 2010. "Law and Economics," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198067733, October.
  18. Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(4), pages 995-1025, November.
  19. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  20. Federico Cingano & Paolo Pinotti, 2009. "Politicians at work. The private returns and social costs of political connections," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 709, Bank of Italy, Economic Research and International Relations Area.
  21. Milton Harris & Artur Raviv, 2008. "A Theory of Board Control and Size," Review of Financial Studies, Society for Financial Studies, Society for Financial Studies, vol. 21(4), pages 1797-1832, July.
  22. Fan, Joseph P.H. & Wong, T.J. & Zhang, Tianyu, 2007. "Politically connected CEOs, corporate governance, and Post-IPO performance of China's newly partially privatized firms," Journal of Financial Economics, Elsevier, Elsevier, vol. 84(2), pages 330-357, May.
  23. Raheja, Charu G., 2005. "Determinants of Board Size and Composition: A Theory of Corporate Boards," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 40(02), pages 283-306, June.
  24. Hermalin, Benjamin E & Weisbach, Michael S, 1998. "Endogenously Chosen Boards of Directors and Their Monitoring of the CEO," American Economic Review, American Economic Association, American Economic Association, vol. 88(1), pages 96-118, March.
  25. Eitan Goldman & Jörg Rocholl & Jongil So, 2009. "Do Politically Connected Boards Affect Firm Value?," Review of Financial Studies, Society for Financial Studies, Society for Financial Studies, vol. 22(6), pages 2331-2360, June.
  26. Yermack, David, 1996. "Higher market valuation of companies with a small board of directors," Journal of Financial Economics, Elsevier, Elsevier, vol. 40(2), pages 185-211, February.
  27. Agrawal, Anup & Knoeber, Charles R, 2001. "Do Some Outside Directors Play a Political Role?," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 44(1), pages 179-98, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Anna Menozzi & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2011. "The determinants of board compensation in SOEs. An application to Italian local public utilities," Carlo Alberto Notebooks, Collegio Carlo Alberto 231, Collegio Carlo Alberto.
  2. Scharfenkamp, Katrin, 2013. "Composition effects of the German Federal Government on the average top income tax burden," Discussion Papers of the Institute for Organisational Economics, University of Münster, Institute for Organisational Economics 2/2013, University of Münster, Institute for Organisational Economics.
  3. Graziano Abrate & Federico Boffa & Fabrizio Erbetta & Davide Vannoni, 2013. "Corruption, Accountability and Efficiency. An Application to Municipal Solid Waste Services," Working papers, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino 022, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
  4. Fabrizio Erbetta & Giovanni Fraquelli & Anna menozzi & Davide Vannoni, 2011. "The determinants of board compensation in SOEs: An application to Italian public utilities," Working papers, Former Department of Economics and Public Finance "G. Prato", University of Torino 24, Former Department of Economics and Public Finance "G. Prato", University of Torino.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oup:indcch:v:21:y:2012:i:3:p:671-698. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.