Do Peer Effects Matter for Explaining Corporate Board Structures?
31 Pages Posted: 5 Apr 2017
Date Written: March 30, 2017
This article examines role of peer effects in determining corporate board structures. We use differences in new guidelines by NYSE and NASDAQ post Sarbanes-Oxley to construct a novel instrument to estimate our peer effects model. We find a strong presence of peer effects in determining board structure and independence of its subcommittees but not overall board independence. The results suggest that one percentage point change in average peer board measure leads to a change of 0.5 percentage points or more in the same direction depending on the board structure measure in question.
JEL Classification: G34, G38
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