Discussion Paper Details

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Title: Trainspotting: Board Appointments in Private Firms

Author(s): Audinga Baltrunaite and Egle Karmaziene

Publication Date: February 2021

Keyword(s): Board Of Directors, director supply and Match quality

Programme Area(s): Industrial Organization

Abstract: This paper examines how the size of the corporate directors' labor market affects board appointments in Italian private limited liability firms. As an exogenous shock to a firm's access to potential non-local directors, we exploit the gradual expansion of the high-speed railway network that improves intercity mobility. We find that the non-local supply of directors increases the positive assortative matching between directors and firms: high-quality firms improve the quality of their boards, while low-quality firms reduce it. We also show that director quality is positively associated with firm growth and productivity, and negatively associated with the probability of default.

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Bibliographic Reference

Baltrunaite, A and Karmaziene, E. 2021. 'Trainspotting: Board Appointments in Private Firms'. London, Centre for Economic Policy Research.