| Autor: |
Bhaskarabhatla, Ajay, Singh, Rajani |
| Zdroj: |
Academy of Management Annual Meeting Proceedings; 2019, Vol. 2019 Issue 1, p1-1, 1p |
| Abstrakt: |
We combine insights from agency and resource dependence theories to argue that interlocks with shell companies weaken monitoring and oversight, but strengthen opportunities for financial fraud through cooptation and collusion, leading to lower firm performance. Shell companies are secretive and information about their operations difficult to observe. We exploit an unprecedented and unexpected public enforcement activity in India in September 2017 that led to the identification of 200,000 shell companies and 300,000 directors serving on their boards. By showing board-level and committee-level director interlocks with these shells lower firm performance before such interlocks are publicly disclosed, we implicate the quality of corporate governance at the interlocked firms rather than the decline in reputation that typically follows such disclosures. Our results are remarkably robust across cross-sectional, instrumental variables, and longitudinal fixed-effects regression analyses. We examine potential mechanisms and conclude with a discussion of the implications of our results for corporate governance and public policy in emerging economies and particularly on the efficacy of public enforcement. [ABSTRACT FROM AUTHOR] |
| Databáze: |
Complementary Index |
| Externí odkaz: |
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