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Appointments of academic directors

Author

Listed:
  • White, Joshua T.
  • Woidtke, Tracie
  • Black, Harold A.
  • Schweitzer, Robert L.

Abstract

We examine the outside director selection process using unique data on appointments of academic directors. Overall, we find that academic directors tend to be appointed by small- and mid-cap firms expanding their boards. However, we find important differences in both the factors influencing academic appointments and the market's reaction when allowing for firm, board, and director heterogeneities. Academics in science, medicine and engineering appear to be appointed for their expertise, and the market reacts favorably. Academic administrators appear to be appointed for their networks, and the market reacts favorably when the administrator is affiliated with a business school but negatively when the administrator is not within close geographic proximity. Business professors appear to be appointed for general expertise and reputation, but we find little evidence of any significant market reaction. The results in this paper highlight the importance of recognizing heterogeneity in understanding the director selection process and the role of outside directors.

Suggested Citation

  • White, Joshua T. & Woidtke, Tracie & Black, Harold A. & Schweitzer, Robert L., 2014. "Appointments of academic directors," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 135-151.
    • Handle: RePEc:eee:corfin:v:28:y:2014:i:c:p:135-151
    DOI: 10.1016/j.jcorpfin.2013.12.007
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate boards; Director selection; Academic directors; Director characteristics; Heterogeneity;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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