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Military directors and stock price informativeness: What's all the fuss about?

Author

Listed:
  • Tasawar Nawaz

    (University of Huddersfield)

  • Tahseen Nawaz

    (The Islamia University of Bahawalpur
    T & T Consultants Pvt Ltd)

Abstract

Exploiting a unique hand-built dataset, belonging to non-financial firms, operating in an emerging economy, this study, first of its kind, reports that stock prices of firms with military-experienced board of directors reflect more firm specific information after controlling for board attributes, agent heterogeneity and firm level variation. The results robust to alternative specifications of informativeness and military director proxy support the notion that military-trained directors may enhance transparency in public listed companies and encourage the incorporation of more firm-specific information into stock prices. Further analysis suggests that military directors may enfeeble CEO–board nexus and settle the directional variations at the corporate board level: military directors bring discipline in the board room that translates into rigorous CEO monitoring and improved corporate governance quality.

Suggested Citation

  • Tasawar Nawaz & Tahseen Nawaz, 2024. "Military directors and stock price informativeness: What's all the fuss about?," Review of Quantitative Finance and Accounting, Springer, vol. 62(4), pages 1505-1523, May.
    • Handle: RePEc:kap:rqfnac:v:62:y:2024:i:4:d:10.1007_s11156-023-01240-6
    DOI: 10.1007/s11156-023-01240-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Military directors; Stock price informativeness; Strategic military praetorianism; Interventionist emerging economy;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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