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Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies

Year 2013, Volume: 3 Issue: 4, 885 - 900, 01.12.2013

Georgeta Vintila Stefan Cristian Gherghina

Abstract

This paper examines the influence and causal relationship between board of directors independence, CEO duality, and firm value. By estimating multivariate regression models for panel data, unbalanced, for a sample of companies listed on the Bucharest Stock Exchange, there resulted a positive influence of the percentage of independent directors on firm value, but down to a threshold of their representation of 47.23 percent, whereupon their influence becomes negative. When we employed fixed-effects models, the relationship previously mentioned was not statistically validated. However, the results provide support for a lack of statistically significant relationship between the percentage of non-executive directors and firm value. Besides, by estimating fixed-effects models we found a positive influence of CEO duality on industry-adjusted Tobin’s Q ratio, but not statistically significant when estimating models without cross-sectional effects. The causal relationships between board independence and firm value identified based on Granger causality are not robust.

Keywords

independent directors non-executive directors firm value panel data regression models Granger causality vector autoregression

Year 2013, Volume: 3 Issue: 4, 885 - 900, 01.12.2013

Georgeta Vintila Stefan Cristian Gherghina

Abstract

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Details

Other ID JA59NV75BF
Authors

Georgeta Vintila This is me

Stefan Cristian Gherghina This is me

Publication Date December 1, 2013
Published in Issue Year 2013 Volume: 3 Issue: 4

Cite

APA Vintila, G., & Gherghina, S. C. (2013). Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies. International Journal of Economics and Financial Issues, 3(4), 885-900.
AMA Vintila G, Gherghina SC. Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies. IJEFI. December 2013;3(4):885-900.
Chicago Vintila, Georgeta, and Stefan Cristian Gherghina. “Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies”. International Journal of Economics and Financial Issues 3, no. 4 (December 2013): 885-900.
EndNote Vintila G, Gherghina SC (December 1, 2013) Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies. International Journal of Economics and Financial Issues 3 4 885–900.
IEEE G. Vintila and S. C. Gherghina, “Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies”, IJEFI, vol. 3, no. 4, pp. 885–900, 2013.
ISNAD Vintila, Georgeta - Gherghina, Stefan Cristian. “Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies”. International Journal of Economics and Financial Issues 3/4 (December2013), 885-900.
JAMA Vintila G, Gherghina SC. Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies. IJEFI. 2013;3:885–900.
MLA Vintila, Georgeta and Stefan Cristian Gherghina. “Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies”. International Journal of Economics and Financial Issues, vol. 3, no. 4, 2013, pp. 885-00.
Vancouver Vintila G, Gherghina SC. Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies. IJEFI. 2013;3(4):885-900.