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Does the South African stock market value an independent dual board leadership structure?

Ntim, Collins G. (2012) Does the South African stock market value an independent dual board leadership structure? Economics and Business Letters, 1 (1). pp. 35-45. ISSN 2254-4380

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Abstract

We examine the crucial policy question of whether the South African (SA) stock market values a dual board leadership structure (DBLS) using a sample of 169 listed firms from 2002 to 2007. We find a significant positive link between DBLS and market valuation, but only in firms with independent chairpersons, implying that the market values firms with independent DBLS more highly. Our results are robust across a number of econometric models that control for different types of market valuation proxies and endogeneity problems. Our findings offer empirical support for agency theory, which suggests that independent DBLS increases the capacity of the board to effectively advise, monitor and discipline top management, and thereby improving market valuation.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Schools: The Business School
The Business School > Quantitative Analysis Research Group
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Depositing User: Sara Taylor
Date Deposited: 30 Jan 2014 16:23
Last Modified: 07 Dec 2016 18:26
URI: http://eprints.hud.ac.uk/id/eprint/19563

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