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

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  • 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.

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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

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Handle: RePEc:oup:indcch:v:21:y:2012:i:3:p:671-698

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Cited by:
  1. Fabrizio Erbetta & Giovanni Fraquelli & Anna menozzi & Davide Vannoni, 2011. "The determinants of board compensation in SOEs: An application to Italian public utilities," Working papers 24, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  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 2/2013, University of Münster, Institute for Organisational Economics.
  3. 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 231, Collegio Carlo Alberto.
  4. Graziano Abrate & Federico Boffa & Fabrizio Erbetta & Davide Vannoni, 2013. "Corruption, Accountability and Efficiency. An Application to Municipal Solid Waste Services," Carlo Alberto Notebooks 316, Collegio Carlo Alberto.

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