Publication Type

Journal Article

Version

acceptedVersion

Publication Date

11-2017

Abstract

Previous research indicates that the performance effect of prestigious directors is ambiguous. Our study addresses this issue by integrating the theoretical lens of board capital and the institutional perspective. We argue that prestigious directors can bring benefits as well as costs. We claim that the emergence of these costs depends on the institutional context, specifically the institutional characteristics of the country's corporate elite circle which is characterized by the elite cohesion and the elite exclusiveness. Our empirical results with a 15-country sample covering the period of 2005 to 2014 provide evidence for the overall existence of a positive performance effect of prestigious boards. However, our results also indicate that these beneficial effects of prestigious boards are mitigated in countries with high elite exclusiveness. Hence, under these certain institutional conditions, the elite-favouring behaviour of prestigious directors also brings costs.

Keywords

Corporate elite, Corporate governance, Director network, Institutions, Prestigious directors

Discipline

Business Law, Public Responsibility, and Ethics | Organizational Behavior and Theory | Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Journal of Management Studies

Volume

54

Issue

7

First Page

1050

Last Page

1078

ISSN

0022-2380

Identifier

10.1111/joms.12275

Publisher

Wiley: 24 months

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1111/joms.12275

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