20th EURAM Annual Conference

Researchers of the Corporate Finance lab have presented a study devoted to the analysis of Board Capital and its impact on company performance in Russia. The presentation was made within 20^th EURAM Annual Conference which was held in Dublin (online) on 4-6 of December 2020. The study was prepared by D. Korablev, I. Ivashkovskaya and A. Stepanova. The abstract of the paper is presented below.

Also the paper WHO CONTRIBUTES TO INNOVATIONS? was been presented on this conference by Elena Karnoukhova, Anastasia Stepanova.

Annotation to report (D. Korablev, I. Ivashkovskaya and A. Stepanova):

The paper advances the line in research of human-side of corporate governance by studying the impact of board capital on financial performance in specific environment of emerging capital market with relatively short history of corporate governance. We draw on the concept of board capital suggested by Hillman and Dalziel (2003), Haynes and Hillman (2010) as a set of heterogenous personal characteristics of directors to be able to execute their functions. We use a sample of 100 publicly traded firms in Russia during the period 2009-2017 with dynamic panel data. Our tests are based on unique data on personal characteristics of directors collected manually. We apply both common factor analysis and index approach to approximate board capital measurer with the use of taken board characteristics. To control the models for endogeneity, we used generalized method of moments with the lags of independent variables. Our results show that board capital indeed has significant and positive impact on company’s future operating performance as well as on company’s current market valuation. We further find that the presence of powerful CEO and weak board independence reduce positive impact of board capital on financial performance in large scale Russian corporations. 

Annotation to paper (Elena Karnoukhova, Anastasia Stepanova):
Innovations are a major driver of the global economy. Recently, the typical major owner become an institutional investor. Moreover, the stakes of institutional owners have increased, which lead to the ownership concentration among types. Traditional investment managers, banks, insurance companies and hedge funds have different goals and strategies, so their roles in firms differ significantly. In this article we analyze the influence of different types of investors on the innovation input and output of Russell 3000 index US companies. This research uses a GLS models to suggest on 17346 firm-year observations for period 2004–11 that different types of investors have different effects on the innovative performance of US companies. By focusing on the ownership concentration, we demonstrate first, that grey investors decrease innovative output; second, that passive independent institutions enhance innovation input and output in virtue of their active monitoring and long-term investment horizons; third, that the concentration of the industry, size and financial constraints play an important role in the innovative performance."