Research Repository

Board independence, corruption and innovation. Some evidence on UK subsidiaries

Sena, V and Duygun, M and Lubrano, G and Marra, M and Shaban, M (2018) 'Board independence, corruption and innovation. Some evidence on UK subsidiaries.' Journal of Corporate Finance, 50. 22 - 43. ISSN 0929-1199

[img]
Preview
Text
title page and paper.pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.

Download (923kB) | Preview

Abstract

In this paper we test the hypothesis that independent boards can insulate a company from the detrimental impact of corruption on its performance (proxied by innovation). To this purpose, we have estimated an innovation production function that links innovat ion outputs to innovation input (na mely investm ent in R&D) on a sample of manufacturing subsidiaries controlled by British multinationals and located in 30 countries. Our analysis covers the period 2005-2013. A fter controlling for the subsidiary’s characteristics (including the ownership st ructure and whether the main shareholders are from Common Law countries), we find that independent board s may mitigate the negative impact of corruption on innovation as subsidiaries located in more corrupt countries and with more independent boards tend t o invest more in R&D and register more valuable patents. These results still hold after controlling for the average age of the directors, the proportion of directors with no local business affiliations and government effectiveness.

Item Type: Article
Uncontrolled Keywords: Board Independence, Corruption, Affiliates, Innovation
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Management Science and Entrepreneurship Group
Depositing User: Elements
Date Deposited: 29 Jan 2018 15:51
Last Modified: 16 Sep 2019 01:00
URI: http://repository.essex.ac.uk/id/eprint/21221

Actions (login required)

View Item View Item