دانلود رایگان مقاله انگلیسی مدیران پرمشغله و عملکرد شرکت: اهمیت محل شرکت - الزویر 2018

ABSTRACT

We examine whether busy directors’ impacts on firm performance vary with firm headquarter locations. We classify firms into Metro and Rural firms based on their headquarter locations. Using a sample of 11,537 firm-year observations from 1997 to 2013, we find that Metro firm busy directors significantly enhance firm performance and are associated with lower default risk, lower cash effective tax rate, lower real earnings management, and more efficient assets utilization. We further show busy independent directors enhance firm performance after the 2007–2008 financial crisis, but not in the early years after SOX. Interestingly, the results indicate that SOX compromises the effectiveness of busy inside directors in Metro firms in the post-SOX period. The location effect is robust across multiple model specifications and various measures of director busyness and Metro firms. We conclude that firm location affects the effectiveness of busy directors and Metro firms benefit more from directors with multiple directorships.

5. Conclusion

By nature, Metro firms not only have easier access to various resources critical to good decision making, but also are subject to more intensified monitoring from various stakeholders than Rural firms. The platform provided by Metro firms can either help build or destroy a director’s reputation quickly in the director labor market, which gives directors incentives to make good use of the bigger platform. In this paper, we examine the moderating effects of location on the association between busy directors and firm performance. We find Metro firms benefit from having directors with multiple directorships, consistent with the predication of both Metro firm busy directors’ greater reputation concerns and resource advantages. The results suggest that directorships in Metro firms are perceived more important and valuable than those in Rural firms and busy directors seem to invest more time and energy in Metro firms as reflected in the positive link between Metro firm busy directors and firm performance we document in this paper. However, we do not find clear evidence that SOX significantly improves the effectiveness of independent directors since the positive relation between busy independent directors and performance becomes stronger only in the post-financial crisis years, not in the years immediately after the passage of SOX. The possible explanation might be that it takes time to realize the positive effect of SOX on corporate governance, or it might be that SOX does not achieve its intended effects. The improvement on the effectiveness of busy independent directors after 2008 might be the results of the increased scrutiny from various stakeholders after the financial crisis.