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Nominee directors on Indian boards: Direct and moderated influence on international investments


  • Panicker, Vidya Sukumara

    () (Indian Institute of Management Kozhikode)

  • Sumit Mitra

    () (Indian Institute of Management Kozhikode)

  • Rajesh Srinivas Upadhyayula

    () (Indian Institute of Management Kozhikode)


Extant literature on Corporate Governance predominantly examines the characteristics of Anglo-Saxon system of corporate governance. Characteristics of board of directors, such as board independence are the outcomes of primary agency problems, observed in this model of corporate governance. However, there is a need to examine the role of board across distinct corporate governance systems arising out of their unique economic and regulatory regimes. For instance, countries with higher ownership concentration and weaker investor protection, face a secondary agency problem and rely more on debt financing for growth. In this study, we examine a specific feature in the Indian Corporate Governance context i.e. representatives of financing institutions on the board of the directors, also known as nominee directors. We use a behavioral risk perspective to understand the preferences of these groups of board member. On a sample of 764 unique firms and 4216 firm year observations spanning the period 2006-2017, we find that the nominee directors are negatively associated with internationalization of emerging economy firms. In addition, we also find that the nominee directors negatively moderate the relationship between different ownership groups (such as pressure sensitive investors and family owners) and internationalization investments of emerging economy firms.

Suggested Citation

  • Panicker, Vidya Sukumara & Sumit Mitra & Rajesh Srinivas Upadhyayula, 2018. "Nominee directors on Indian boards: Direct and moderated influence on international investments," Working papers 251, Indian Institute of Management Kozhikode.
  • Handle: RePEc:iik:wpaper:051

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    Corporate Governance; the Indian Corporate Governance;

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