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Performance effects of appointing other firms' executive directors

Author

Listed:
  • Charlie Weir

    (Aberdeen Business School)

  • Oleksandr Talavera

    () (Durham Business School)

  • Alexander Muravyev

    (IZA and St. Petersburg University GSOM)

Abstract

This paper studies the relationship between directors’ human capital and the company’s performance. In particular, we focus on the effect on performance of non-executive directors who are also executive directors in other firms. We find a positive relationship between the presence of these non-executive directors and the accounting performance of the appointing company. The effect is stronger if these directors are also executive directors at companies that are performing well. Additionally, the similarity of industry plays a role. The results support the view that appointing firms benefit from the human capital of the appointee.

Suggested Citation

  • Charlie Weir & Oleksandr Talavera & Alexander Muravyev, 2011. "Performance effects of appointing other firms' executive directors," Working Papers 2011_12, Durham University Business School.
  • Handle: RePEc:dur:durham:2011_12
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    File URL: http://dro.dur.ac.uk/10340
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    References listed on IDEAS

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    More about this item

    Keywords

    human capital; executive directors; non-executive directors; company performance;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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