Trainspotting: Board Appointments in Private Firms

47 Pages Posted: 7 Aug 2019 Last revised: 15 Oct 2020

See all articles by Audinga Baltrunaite

Audinga Baltrunaite

Bank of Italy

Egle Karmaziene

VU University Amsterdam; Swedish House of Finance; Tinbergen Institute

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Date Written: October 14, 2020

Abstract

This paper examines how the size of the corporate directors’ labor market affects board appointments in Italian private limited liability firms. As an exogenous shock to a firm’s access to potential non-local directors, we exploit the gradual expansion of the high-speed railway network that improves intercity commuting. We find that the non-local supply of directors increases the positive assortative matching between directors and firms: high-quality firms improve the quality of their boards, while low-quality firms reduce it. We also show that director quality is positively associated with firm growth and productivity, and negatively associated with the 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 (October 14, 2020). Bank of Italy Temi di Discussione (Working Paper) No. 1278, Available at SSRN: https://ssrn.com/abstract=3431413 or http://dx.doi.org/10.2139/ssrn.3431413

Audinga Baltrunaite

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Egle Karmaziene (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

HOME PAGE: http://www.eglekarmaziene.com

Swedish House of Finance

Drottninggatan 98
Stockholm, 111 60
Sweden

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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