Publication: Can Staggered Boards Improve Value? Causal Evidence from Massachusetts
No Thumbnail Available
Open/View Files
Date
2021-09-14
Published Version
Journal Title
Journal ISSN
Volume Title
Publisher
Wiley
The Harvard community has made this article openly available. Please share how this access benefits you.
Citation
Daines, Robert, Shelley Xin Li, and Charles C.Y. Wang. "Can Staggered Boards Improve Value? Causal Evidence from Massachusetts." Contemporary Accounting Research 38, no. 4 (Winter 2021): 3053–3084.
Research Data
Abstract
We study the effect of staggered boards (SBs) using a quasi-experiment: a 1990 law that imposed an SB on all Massachusetts-incorporated firms. The law led to an increase in Tobin's Q, investment in CAPEX and R&D, patents, higher-quality patented innovations, and resulted in higher profitability. These effects are concentrated at innovating firms, especially those facing greater Wall Street scrutiny. An increase in institutional and dedicated investors also accompanied the imposition of SBs, facilitating a longer-term orientation. The evidence suggests that early-life-cycle firms facing high information asymmetries benefit from SBs by allowing managers to focus on long-term investments and innovations.
Description
Other Available Sources
Keywords
Economics and Econometrics, Finance, Accounting
Terms of Use
This article is made available under the terms and conditions applicable to Open Access Policy Articles (OAP), as set forth at Terms of Service