TY - JOUR
T1 - Independent directors’ dissensions and firm value
AU - Choi, Wonseok
AU - Rabarison, Monika K.
AU - Wang, Bin
N1 - Publisher Copyright:
© 2021 Board of Trustees of the University of Illinois
PY - 2021/5
Y1 - 2021/5
N2 - Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.
AB - Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.
KW - Board of directors
KW - Corporate governance
KW - Dissension
KW - Firm value
KW - Independent
UR - http://www.scopus.com/inward/record.url?scp=85101978433&partnerID=8YFLogxK
U2 - 10.1016/j.qref.2021.02.003
DO - 10.1016/j.qref.2021.02.003
M3 - Article
AN - SCOPUS:85101978433
SN - 1062-9769
VL - 80
SP - 258
EP - 271
JO - Quarterly Review of Economics and Finance
JF - Quarterly Review of Economics and Finance
ER -