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Status已發表Published
Board surname sharing and investment efficiency: Evidence from Chinese state-owned enterprises
Huang, Baibing; Yang, Endong; Zhang, Yang
2022-07
Source PublicationCorporate Governance: An International Review
ABS Journal Level3
ISSN1467-8683
Abstract

Research Question/Issue

Using data on Chinese listed state-owned enterprises (SOEs), this study examines the impact of board surname sharing on firms' investment efficiency.

Research Findings/Insights

We find that surname sharing among a firm's board of directors is positively associated with its investment efficiency. The main result continues to hold when using alternative measures and accounting for endogeneity. Specifically, we show higher surname homogeneity mitigates agency costs and information asymmetry. Taken together, this evidence supports the view that board surname sharing is conducive to effective communications in the boardroom, thus enhancing board effectiveness and collective decision-making among board members.

Theoretical/Academic Implications

With the theory of social identity, the literature presents two opposing views on the impact of group identity on corporate behaviors. One view focuses on the cost of favoritism bias and coalition while the other view illustrates the benefits of group coordination and communication. We shed light on this debate by documenting that the group identity of surname sharing might increase corporate investment efficiency. To our knowledge, this is the first study providing evidence that social identity benefits board decision-making.

Practitioner/Policy Implications

Our findings have implications for formulating the “best practice” on executive selection and boosting board composition. In addition to structural factors and procedural rules, shareholders and policymakers may need to carefully consider creating the climate of a robust social system of the board to ensure a virtuous cycle of trust and outspokenness, especially when dealing with the problems of passive monitoring.

DOIhttps://doi.org/10.1111/corg.12483
Indexed BySSCI
Language英語English
Funding ProjectPolitical Corruption, Corporate Social Responsibility, and Sustainability
PublisherWiley Online Library
Fulltext Access
Citation statistics
Document TypeJournal article
CollectionDEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorZhang, Yang
AffiliationUniversity of Macau
Recommended Citation
GB/T 7714
Huang, Baibing,Yang, Endong,Zhang, Yang. Board surname sharing and investment efficiency: Evidence from Chinese state-owned enterprises[J]. Corporate Governance: An International Review,2022.
APA Huang, Baibing,Yang, Endong,&Zhang, Yang.(2022).Board surname sharing and investment efficiency: Evidence from Chinese state-owned enterprises.Corporate Governance: An International Review.
MLA Huang, Baibing,et al."Board surname sharing and investment efficiency: Evidence from Chinese state-owned enterprises".Corporate Governance: An International Review (2022).
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