New Kids on the Block: The Effect of Generation X Directors on Corporate Performance

51 Pages Posted: 18 Mar 2020 Last revised: 9 Feb 2023

See all articles by Zhaozhao He

Zhaozhao He

University of New Hampshire - Department of Accounting & Finance

Mihail K. Miletkov

University of New Hampshire - Paul College of Business and Economics

Viktoriya Staneva

University of New Hampshire - Peter T. Paul College of Business and Economics

Date Written: January 2023

Abstract

Generation X directors are slowly replacing Baby Boomers on U.S. corporate boards and will eventually dominate corporate boardrooms in the U.S. and around the world. We provide the first empirical evidence that the presence of Generation X directors is associated with better corporate performance. The Generation X effect is not driven by other director attributes such as sex, ethnicity, or professional expertise, and is robust to instrumental variables estimation. The result is also independent from the effect of director age which, although related to director's generational identity, captures something fundamentally different and is controlled for in all our regressions. Finally, we document that companies with Generation X directors engage in value enhancing ESG and innovation activities and facilitate the inclusion of women on the board.

Keywords: Board structure, board diversity, Generation X, firm performance, female directors, corporate social responsibility, corporate innovation

JEL Classification: G34

Suggested Citation

He, Zhaozhao and Miletkov, Mihail K. and Staneva, Viktoriya, New Kids on the Block: The Effect of Generation X Directors on Corporate Performance (January 2023). Journal of Empirical Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3540512 or http://dx.doi.org/10.2139/ssrn.3540512

Zhaozhao He

University of New Hampshire - Department of Accounting & Finance ( email )

Durham, NH 03824
United States
603-862-3355 (Phone)

HOME PAGE: http://sites.google.com/site/zhaozhaohe

Mihail K. Miletkov (Contact Author)

University of New Hampshire - Paul College of Business and Economics ( email )

10 Garrison Ave
Durham, NH 03824
United States

Viktoriya Staneva

University of New Hampshire - Peter T. Paul College of Business and Economics ( email )

NH
United States

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