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The effects of board structure on corporate performance: Evidence from East African frontier markets

journal contribution
posted on 29.04.2020 by Yilmaz Guney, Ahmet Karpuz, Gabriel Komba
The effectiveness of the well-known corporate governance practices may not be universal due to fundamental differences in the environments under which firms operate. By using hand-collected data from all the non-financial firms listed on the unexplored East African frontier markets (i.e., Kenya, Tanzania and Uganda), we examine the effect of board characteristics on the performance of firms. Our results show that board size has a negative and significant effect on firm performance. The presences of foreigners and civil servants on the board play positive roles on financial performance, where the agency and resource dependence theories apply. Further, we find that board members with higher education also contribute to firm performance. These findings still hold when we consider the 2008–2009 financial crisis period. Overall, we show that in a business climate where ownership is largely dominated by few shareholders, the conventional governance mechanisms do not work effectively.

History

School

  • Business and Economics

Department

  • Business

Published in

Research in International Business and Finance

Volume

53

Issue

October 2020

Publisher

Elsevier

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier B.V.

Publisher statement

This paper was accepted for publication in the journal Research in International Business and Finance and the definitive published version is available at https://doi.org/10.1016/j.ribaf.2020.101222.

Acceptance date

08/03/2020

Publication date

2020-04-30

Copyright date

2020

ISSN

0275-5319

Language

en

Depositor

Dr Ahmet Karpuz. Deposit date: 28 April 2020

Article number

101222

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