{"title":"Board centrality and investment efficiency","authors":"Kambar Farooq, C. Chui, Muhammad Azeem","doi":"10.1080/16081625.2021.2003213","DOIUrl":null,"url":null,"abstract":"ABSTRACT We study whether firms with central network boards influence investment efficiency. The results demonstrate that board centrality enhances investment efficiency and mitigates overinvestment but show an insignificant impact on underinvestment. This asymmetric effect on over and underinvestment can be attributed to different roles played by executive (internal) directors and external directors on the board. Further analysis reveals that the board centrality and investment efficiency relationship is stronger for firms with higher managerial entrenchment and informational asymmetry problems. The findings support the notion that social capital, in the shape of board networks, improves monitoring and information environment, consequently enhancing investment efficiency.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"11 1","pages":"633 - 666"},"PeriodicalIF":1.4000,"publicationDate":"2021-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asia-Pacific Journal of Accounting & Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1080/16081625.2021.2003213","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 1
Abstract
ABSTRACT We study whether firms with central network boards influence investment efficiency. The results demonstrate that board centrality enhances investment efficiency and mitigates overinvestment but show an insignificant impact on underinvestment. This asymmetric effect on over and underinvestment can be attributed to different roles played by executive (internal) directors and external directors on the board. Further analysis reveals that the board centrality and investment efficiency relationship is stronger for firms with higher managerial entrenchment and informational asymmetry problems. The findings support the notion that social capital, in the shape of board networks, improves monitoring and information environment, consequently enhancing investment efficiency.
期刊介绍：
The Asia-Pacific Journal of Accounting & Economics (APJAE) is an international forum intended for theoretical and empirical research in all areas of economics and accounting in general. In particular, the journal encourages submissions in the following areas: Auditing, financial reporting, earnings management, financial analysts, the role of accounting information, international trade and finance, industrial organization, strategic behavior, market structure, financial contracts, corporate governance, capital markets, and financial institutions. The journal welcomes contributions related to the Asia Pacific region, and targets top quality research from scholars with diverse regional interests. The editors encourage submission of high quality manuscripts with innovative ideas. The editorial team is committed to an expedient review process.
京公网安备 11010802042870号
京ICP备2023020795号-1
分享
求助内容：
应助结果提醒方式：
扫码关注我们
