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Endogenous board formation and its determinants in a transition economy: evidence from Russia

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  • Iwasaki, Ichiro
  • 岩﨑, 一郎
  • イワサキ, イチロウ

Abstract

Using a unique dataset of joint-stock companies in Russia, we studied the endogenous formation of corporate boards and its determinants. The findings reported in this paper strongly suggest that the theories and empirical methods of financial and organizational economics help accurately pinpoint the determinants of board size, proportion of outsider directors, and outsideness of chairman appointment of Russian firms. We also found that their board structure can be reasonably explained by the bargaining hypothesis. Furthermore, our empirical evidence demonstrated that Russia’s legal system and peculiarities as a transition economy also have a great deal of influence in determining board formation.

Suggested Citation

  • Iwasaki, Ichiro & 岩﨑, 一郎 & イワサキ, イチロウ, 2007. "Endogenous board formation and its determinants in a transition economy: evidence from Russia," CEI Working Paper Series 2007-1, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2007-1
    Note: First Draft: January, 2007 Current Version: October, 2007
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/29445/wp2007-1Revised.pdf
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    Cited by:

    1. Vernikov, Andrei, 2007. "Corporate governance and control in Russian banks," MPRA Paper 10028, University Library of Munich, Germany.
    2. Iwasaki, Ichiro, 2008. "The determinants of board composition in a transforming economy: Evidence from Russia," Journal of Corporate Finance, Elsevier, vol. 14(5), pages 532-549, December.

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    More about this item

    Keywords

    board formation; endogeneity; agency theory; bargaining model; Russia;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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