Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2020.1788965
Independent director interlocks: effects and boundary on the earnings persistence of the firm
Fang-Nan Liao
Feng-Wen Chen
Sažetak
This article first analyses the impact of independent director interlocks on firms’ earnings persistence in China, an emerging market
from 2007 to 2017. Using the independent director network data
and the unique internal control index, this article investigates the
association between independent director interlocks and earnings
persistence, and the roles of firms’ outside director interlocks and
firms’ inside internal control playing in earnings persistence. Our
results reveal a significant and positive association between independent director interlocks and earnings persistence, and in the
context, there is a clear mediation effect of internal control in
relationship of independent director interlocks and earnings persistence. Further analyses on the scope and stability of independent director interlocks effects show that independent director
interlocks can both improve accrual earnings persistence and
cash flow persistence. Meanwhile, the effect of independent director interlocks differentiates under the influence of firms’ strategy, only playing a significant role in defensive ones. Moreover,
we find that independent director interlocks can relieve the
‘accrual anomalies’ in the securities market. Our results are robust
to the various measure of earnings persistence and alternative
methodological techniques.
Ključne riječi
Independent director interlocks; earnings persistence; internal control; accrual anomalies; corporate governance; emerging economy
Hrčak ID:
301171
URI
Datum izdavanja:
31.12.2021.
Posjeta: 188 *