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The bright side of staggered boards: Evidence from labor investment efficiency

Author

Listed:
  • Le, Anh-Tuan
  • Hongren Huang, Henry
  • Do, Trung K.

Abstract

Using U.S. data from 1983 to 2015, we document that firms with staggered boards exhibit greater labor investment efficiency, measured as less abnormal net hiring, including over-investment (over-hiring and under-firing) and under-investment (under-hiring). A path analysis shows that 8.3% of the total effect of staggered boards on labor investment efficiency is explained by the positive effect of staggered boards on institutional ownership. Overall, our results support the view that staggered boards strengthen managers’ commitment to long-term shareholders’ interests, thereby encouraging managerial efforts to boost labor investment efficiency.

Suggested Citation

  • Le, Anh-Tuan & Hongren Huang, Henry & Do, Trung K., 2024. "The bright side of staggered boards: Evidence from labor investment efficiency," Journal of Contemporary Accounting and Economics, Elsevier, vol. 20(3).
    • Handle: RePEc:eee:jocaae:v:20:y:2024:i:3:s1815566924000390
    DOI: 10.1016/j.jcae.2024.100439
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    More about this item

    Keywords

    Staggered board; Classified board; Labor investment efficiency; Employment decisions;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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