Board Composition and Firm Performance: Evidence from China During Institutuinal Transitions

Abstract

In this paper, we integrate agency theory, resource dependence theory, and institutional perspective to investigate the relationship between the factors associated with the composition of the board of directors and firm performance in the context of emerging economy - China. Our sample will be drawn from 100 public traded companies in Shanghai and Shenzhen stock exchange in China from 1999 to 2015. Using a time series analysis, we hope to find the results show the proportion of independent directors in board composition, the number of interlocked directors in the board, the number of directors from different industry, the number of directors from different types of company will be positively related to firm performance. Furthermore, we expect the results also show that the heterogeneity of board and the size of board will have the positive influence at the beginning but will negative with the increase of heterogeneity and the size. Final we expect that the level of institutions development in China will positively moderate the above-mentioned relationship between characteristics of the board of directors and firm performance.