Trainspotting: Board Appointments in Private Firms

49 Pages Posted: 1 Mar 2021

See all articles by Audinga Baltrunaite

Audinga Baltrunaite

Bank of Italy

Egle Karmaziene

VU University Amsterdam; Swedish House of Finance

Multiple version iconThere are 3 versions of this paper

Date Written: February 2021

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 mobility. 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.

JEL Classification: G32, G34

Suggested Citation

Baltrunaite, Audinga and Karmaziene, Egle, Trainspotting: Board Appointments in Private Firms (February 2021). CEPR Discussion Paper No. DP15828, Available at SSRN: https://ssrn.com/abstract=3795211

Audinga Baltrunaite (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Egle Karmaziene

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Swedish House of Finance ( email )

Drottninggatan 98
Stockholm, 111 60
Sweden

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