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Corporate board tenure and firm performance: Evidence from non-financial UK firms.

Lawrenz, Jakub LU (2022) NEKN02 20221
Department of Economics
Abstract
This study focuses on empirical estimation of the relationship between corporate board tenure and firm performance. Firm performance is measured by return on assets (ROA) and Tobin’s Q. The sample consists of 177 non-financial UK firms observed over 9 years (unbalanced panel). The relevant literature implies agency costs inherent in the modern corporation’s organisational structure as well as the relevance of board dependence and directors’ equity compensation with respect to the relationship between board tenure and firm performance. The study incorporates the fixed effects estimation method, lead-lag specifications, and a rich set of controls to address endogeneity concerns. The findings indicate that an extended director tenure... (More)
This study focuses on empirical estimation of the relationship between corporate board tenure and firm performance. Firm performance is measured by return on assets (ROA) and Tobin’s Q. The sample consists of 177 non-financial UK firms observed over 9 years (unbalanced panel). The relevant literature implies agency costs inherent in the modern corporation’s organisational structure as well as the relevance of board dependence and directors’ equity compensation with respect to the relationship between board tenure and firm performance. The study incorporates the fixed effects estimation method, lead-lag specifications, and a rich set of controls to address endogeneity concerns. The findings indicate that an extended director tenure negatively affects firm performance (both ROA and Tobin’s Q). (Less)
Please use this url to cite or link to this publication:
author
Lawrenz, Jakub LU
supervisor
organization
course
NEKN02 20221
year
type
H1 - Master's Degree (One Year)
subject
keywords
corporate governance, agency theory, board tenure, firm performance, corporate finance
language
English
id
9084089
date added to LUP
2022-10-10 09:35:37
date last changed
2022-10-10 09:35:37
@misc{9084089,
  abstract     = {{This study focuses on empirical estimation of the relationship between corporate board tenure and firm performance. Firm performance is measured by return on assets (ROA) and Tobin’s Q. The sample consists of 177 non-financial UK firms observed over 9 years (unbalanced panel). The relevant literature implies agency costs inherent in the modern corporation’s organisational structure as well as the relevance of board dependence and directors’ equity compensation with respect to the relationship between board tenure and firm performance. The study incorporates the fixed effects estimation method, lead-lag specifications, and a rich set of controls to address endogeneity concerns. The findings indicate that an extended director tenure negatively affects firm performance (both ROA and Tobin’s Q).}},
  author       = {{Lawrenz, Jakub}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Corporate board tenure and firm performance: Evidence from non-financial UK firms.}},
  year         = {{2022}},
}