The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Higher market valuation of companies with a small board of directors
Open accessAbstract
I present evidence consistent with theories that small boards of directors are more effective. Using Tobin's Q as an approximation of market valuation, I find an inverse association between board size and firm value in a sample of 452 large U.S. industrial corporations between 1984 and 1991. The result is robust to numerous controls for company size, industry membership, inside stock ownership, growth opportunities, and alternative corporate governance structures. Companies with small boards also exhibit more favorable values for financial ratios, and provide stronger CEO performance incentives from compensation and the threat of dismissal.
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Citations
Cites
Panel data and unobservable individual effects
Hausman, J., & Taylor, W. (1981) · Journal of Econometrics · doi:10.1016/0304-4076(81)90085-3 · Cited by 2,309
Cited by
Corporate Governance and Equity Prices
Gompers, P., Ishii, J., & Metrick, A. (2003) · The Quarterly Journal of Economics · doi:10.1162/00335530360535162 · Cited by 6,120
Corporate governance, chief executive officer compensation, and firm performance
Core, J. E., Holthausen, R. W., & Larcker, D. F. (1999) · Journal of Financial Economics · doi:10.1016/s0304-405x(98)00058-0 · Cited by 4,335
Are CEOs Rewarded for Luck? The Ones Without Principals Are
Bertrand, M., & Mullainathan, S. (2001) · The Quarterly Journal of Economics · doi:10.1162/00335530152466269 · Cited by 1,740
Behind the Scenes: The Corporate Governance Preferences of Institutional Investors
McCAHERY, J. A., SAUTNER, Z., & STARKS, L. T. (2016) · The Journal of Finance · doi:10.1111/jofi.12393 · Cited by 1,494
Financial accounting information, organizational complexity and corporate governance systems
Bushman, R., Chen, Q., Engel, E., & Smith, A. (2004) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2003.09.005 · Cited by 1,059
Metadata
- Authors
- Yermack, D.
- Venue
- Journal of Financial Economics
- Publisher
- Elsevier BV
- Published
- 1996-02
- Volume
- 40
- Issue
- 2
- Pages
- 185-211
- ISSN
- 0304-405X (ISSN-L)
- OpenAlex
- W2074132263
- Cited by
- 6,603
- References
- 1
- FWCI
- 137.59
- Type
- journal article
- Language
- en
- Open access
- hybrid
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- Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics. https://doi.org/10.1016/0304-405x(95)00844-5
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
