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Performance effects of appointing other firms' executive directors

Weir, Charlie; Talavera, Oleksandr; Muravyev, Alexander

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Authors

Charlie Weir

Oleksandr Talavera

Alexander Muravyev



Abstract

This paper studies the relationship between directors’ human capital and the company’s performance. In particular, we focus on the effect on performance of non-executive directors who are also executive directors in other firms. We find a positive relationship between the presence of these non-executive directors and the accounting performance of the appointing company. The effect is stronger if these directors are also executive directors at companies that are performing well. Additionally, the similarity of industry plays a role. The results support the view that appointing firms benefit from the human capital of the appointee.

Citation

Weir, C., Talavera, O., & Muravyev, A. (2011). Performance effects of appointing other firms' executive directors

Publication Date Oct 1, 2011
Deposit Date Dec 7, 2012
Publicly Available Date Dec 7, 2012
Series Title Durham University Business School Economics Finance Accounting Working Papers
Keywords Human capital, Executive directors, Non-executive directors, Company performance, JEL classifcation: G34 G39.
Publisher URL http://www.dur.ac.uk/business/faculty/working-papers/

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