Independent Directors' Dissensions and Firm Value

Authors

Wonseok Choi, University of North Texas Health Science Center
Monika K. Rabarison, The University of Texas Rio Grande Valley
Bin Wang, Marquette UniversityFollow

Document Type

Article

Publication Date

5-2021

Publisher

Elsevier

Source Publication

Quarterly Review of Economics and Finance

Source ISSN

1062-9769

Original Item ID

10.1016/j.qref.2021.02.003

Abstract

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.

Comments

Accepted version. Quarterly Review of Economics and Finance, Vol. 80 (May 2021): 258-271. DOI. © 2021 Elsevier. Used with permission.

Recommended Citation

Choi, Wonseok; Rabarison, Monika K.; and Wang, Bin, "Independent Directors' Dissensions and Firm Value" (2021). Finance Faculty Research and Publications. 158.
https://epublications.marquette.edu/fin_fac/158