Independent director reputation incentives and stock price informativeness

Research output: Contribution to journalArticlepeer-review

Abstract

We link the reputation incentives of independent directors to the informativeness of stock prices. We show that when more independent directors rank a directorship high, the firm-specific information content in a firm’s stock price increases. Further, independent directors with high reputation incentives serve firms that voluntarily disclose more information and display lower crash risk. We find similar results when using plausibly exogenous shocks to the reputation incentives of independent directors. Our results therefore support a causal interpretation of the positive influence that independent directors with reputation incentives exert on corporate transparency.
Original languageEnglish
Pages (from-to)219-235
Number of pages17
JournalJournal of Corporate Finance
Volume47
DOIs
Publication statusPublished - 27 Sep 2017

Keywords

  • director reputation
  • financial reporting quality
  • information asymmetry

Fingerprint

Dive into the research topics of 'Independent director reputation incentives and stock price informativeness'. Together they form a unique fingerprint.
  • Essays on corporate boards

    Sila, V., 2015, 248 p.

    Research output: ThesisDoctoral Thesis

Cite this