Trainspotting: Board Appointments in Private Firms

Posted: 7 Aug 2019 Last revised: 2 Oct 2019

See all articles by Audinga Baltrunaite

Audinga Baltrunaite

Bank of Italy

Egle Karmaziene

VU University Amsterdam; University of Groningen; Swedish House of Finance; Tinbergen Institute

Date Written: August 2, 2019


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. 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. Under the assumption that the two are complements in the production process, we measure firm-director match quality by the extent of positive assortative matching. We show that the match quality improves due to a shock in non-local directors' supply; this effect arises from a more active re-matching along the train line. We also document a positive association between this director supply shock and firm growth and productivity. Interestingly, more productive firms benefit more from the access to a broader direct talent pool, while the effect is attenuated for family firms.

Keywords: director supply, board of directors, match quality, productivity

JEL Classification: G32, G34

Suggested Citation

Baltrunaite, Audinga and Karmaziene, Egle, Trainspotting: Board Appointments in Private Firms (August 2, 2019). Available at SSRN:

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


University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV


Swedish House of Finance

Drottninggatan 98
Stockholm, 111 60

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA

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