The Relation Between Firm Ownership Structure and Board of Director Independence: An International Meta-Analysis

40 Pages Posted: 19 Dec 2018

See all articles by Leticia Pérez-Calero

Leticia Pérez-Calero

University Pablo Olavide of Seville

José Manuel Hurtado

Universidad Pablo de Olavide

Félix J. López-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting; National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy

Date Written: November 29, 2018

Abstract

Prior research into the relationship between firm ownership structure and board of director independence has been conducted in a variety of international settings and has led to mixed results. Given this divergence, we meta-analyze 127 studies in order to test whether different types of owners (if a firm's ownership lies mainly in the hands of managers, families or institutions) explain these mixed results. We also examine whether the institutional context (civil, common or emerging legal system) may moderate the relationship between ownership concentration and type of owner and board independence. We find that ownership concentration has a weak but significant negative relation with board independence in common law countries, and when firms are under managerial or family control. In contrast, the relation is positive for firms in civil law countries or for firms owned by institutional investors. Thus, our paper reveals differences in the relation between ownership concentration and board of director independence conditional on type of owner and the institutional context in which the firm operates. Our research has practical implications for practitioners and policy makers, and provides them with certain guidelines aimed at achieving the most efficient design for corporate governance mechanisms.

Keywords: Corporate Governance, Ownership Structure, Board of Directors, Institutional Context, Meta-Analysis

Suggested Citation

Pérez-Calero, Leticia and Hurtado-Gonzalez, Jose-Manuel and Lopez-Iturriaga, Felix Javier, The Relation Between Firm Ownership Structure and Board of Director Independence: An International Meta-Analysis (November 29, 2018). International Review of Financial Analysis, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3293256

Leticia Pérez-Calero (Contact Author)

University Pablo Olavide of Seville ( email )

Seville
Spain

Jose-Manuel Hurtado-Gonzalez

Universidad Pablo de Olavide ( email )

Felix Javier Lopez-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting ( email )

Avda. Valle Esgueva 6
47011 Valladolid
Spain
+34 983 184 395 (Phone)
+34 983 183830 (Fax)

HOME PAGE: http://www2.eco.uva.es/flopez

National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy ( email )

Lebedeva,27
Perm, Perm 614070
Russia

Register to save articles to
your library

Register

Paper statistics

Downloads
35
Abstract Views
134
PlumX Metrics