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Do CEOs' Outside Directorships Affect the Performance of Their Own Firms?

Zhu, Pengcheng (2019) Do CEOs' Outside Directorships Affect the Performance of Their Own Firms? Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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The practice of CEOs serving on the board of other public companies has raised concerns from investors and proxy advisory firms about the potential harm to shareholders. In this paper, I analyze the change in performance of CEOs’ own firms after their appointment as an outside director at another firm. Using the distance to appointing firms’ headquarters as an instrumental variable for directorship appointments, I find that CEOs' own firms exhibit improvements in operating performance following their first appointment and the announcements of such appointments have a positive stock price reaction. Subsequent appointments do not result in performance declines. Performance improvements following the first appointments are stronger in cases where the appointing firm is relatively larger and where the appointing firm operates in vertically related industries. These findings resolve concerns from investors and show that CEOs’ own firms can benefit from their outside directorships through CEOs' learning and information sharing.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Zhu, Pengchengpez28@pitt.edupez28
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairDenis,
Committee MemberDenis,
Committee MemberKoch,
Committee MemberLehn,
Committee MemberKarolyi,
Committee Member,
Date: 27 September 2019
Date Type: Publication
Defense Date: 21 June 2019
Approval Date: 27 September 2019
Submission Date: 30 July 2019
Access Restriction: 1 year -- Restrict access to University of Pittsburgh for a period of 1 year.
Number of Pages: 116
Institution: University of Pittsburgh
Schools and Programs: Joseph M. Katz Graduate School of Business > Business Administration
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: Corporate governance; Chief Executive Officer; Outside directorship
Date Deposited: 27 Sep 2019 17:14
Last Modified: 27 Sep 2020 05:15

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