X factor in the boardroom: The moderating effect of generation X directors on the relation between advertising spending and firm performance

This paper examines the effect of Generation X directors on the relation between firm advertising spending and performance. In recent years, the advertising industry has been going through an unprecedented shift away from traditional and towards an increased reliance on digital advertising formats. As firms navigate this changing landscape, an underlying trend in corporate America is the increasing presence of Generation X directors on corporate boards. This study investigates the intersection of the two phenomena and finds that firms with a higher percentage of Generation X directors exhibit a more positive relation between advertising spending and firm performance, as well as faster adjustment to the optimal mix of traditional and digital forms of advertising. These effects are not driven by other director attributes such as gender, ethnicity, age, or professional background and are robust to propensity score matching and instrumental variables estimation.