Trainspotting: Board Appointments in Private Firms

42 Pages Posted: 7 Aug 2019 Last revised: 26 May 2020

See all articles by Audinga Baltrunaite

Audinga Baltrunaite

Bank of Italy

Egle Karmaziene

VU University Amsterdam; Swedish House of Finance; Tinbergen Institute

Date Written: May 25, 2020


We examine how the size of the corporate directors' labor market affects the quality of board appointments in Italian private firms. To establish the causality of the relationship, we exploit exogenous variation in a firm's access to non-local potential directors induced by the gradual introduction of a high-speed train, which improved the connection between cities. Using administrative data on board members of the universe of limited liability companies and a two-way fixed effects model, we obtain time-invariant measures of the firm and director quality. We demonstrate that a positive shock to the non-local director supply increases the extent of positive assortative matching between firms and directors. High-quality firms improve the quality of their boards, while lower quality firms attract lower quality directors. The effect arises from a more active re-matching along the high-speed train line. Our results further suggest that the private firms' boards with better "quality" directors are associated with higher firm growth and productivity, and lower probability of default.

Keywords: director supply, board of directors, match quality

JEL Classification: G32, G34

Suggested Citation

Baltrunaite, Audinga and Karmaziene, Egle, Trainspotting: Board Appointments in Private Firms (May 25, 2020). Available at SSRN: or

Audinga Baltrunaite

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184

Egle Karmaziene (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV


Swedish House of Finance

Drottninggatan 98
Stockholm, 111 60

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics