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Diversity, outside directors and firm valuation: Korean evidence

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  • Kim, Haksoon
  • Lim, Chanwoo

Abstract

This paper examines the relationship between the diversity of independent outside directors and the valuation of Korean firms after Korea's 1998 corporate-governance reforms. First, the study finds consistent positive relationships between firm valuation and the proportion of independent outside directors with government experience, but finds negative relationships between firm valuation and the proportion of independent outside directors who are accountants. Second, the study finds that the diversity of independent outside directors' academic majors or age has consistently positive effects on firm valuation. This result implies that not only the quantity but also the quality of independent outside directors affects the valuation of Korean companies.

Suggested Citation

  • Kim, Haksoon & Lim, Chanwoo, 2010. "Diversity, outside directors and firm valuation: Korean evidence," Journal of Business Research, Elsevier, vol. 63(3), pages 284-291, March.
  • Handle: RePEc:eee:jbrese:v:63:y:2010:i:3:p:284-291
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    References listed on IDEAS

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    Cited by:

    1. Siri Terjesen & Eduardo Barbosa Couto & Paulo Morais Francisco, 2016. "Does the presence of independent and female directors impact firm performance? A multi-country study of board diversity," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 20(3), pages 447-483, September.
    2. Sitthipongpanich, Thitima & Polsiri, Piruna, 2015. "Do CEO and board characteristics matter? A study of Thai family firms," Journal of Family Business Strategy, Elsevier, vol. 6(2), pages 119-129.
    3. repec:eee:touman:v:48:y:2015:i:c:p:139-153 is not listed on IDEAS
    4. Oskar Kowalewski, 2012. "Corporate Governance and Pension Fund Performance," Contemporary Economics, University of Finance and Management in Warsaw, vol. 6(1), March.
    5. Upadhyay, Arun & Zeng, Hongchao, 2014. "Gender and ethnic diversity on boards and corporate information environment," Journal of Business Research, Elsevier, vol. 67(11), pages 2456-2463.
    6. Rivas, Jose Luis, 2012. "Diversity & internationalization: The case of boards and TMT's," International Business Review, Elsevier, vol. 21(1), pages 1-12.
    7. Talavera, Oleksandr & Yin, Shuxing & Zhang, Mao, 2016. "Managing the diversity: board age diversity, directors’ personal values, and bank performance," MPRA Paper 71927, University Library of Munich, Germany.
    8. Min, Byung S. & Smyth, Russell, 2014. "Corporate governance, globalization and firm productivity," Journal of World Business, Elsevier, vol. 49(3), pages 372-385.
    9. van den Oever, Koen, 2017. "Uncharted waters : A behavioral approach to when, why and which organizational changes are adopted," Other publications TiSEM 0136c8c2-ecdd-4f82-8ca7-d, Tilburg University, School of Economics and Management.
    10. Christophe Volonté & Pascal Gantenbein, 2016. "Directors’ human capital, firm strategy, and firm performance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 20(1), pages 115-145, March.

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