Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2142810
The effect of geographic distance on independent directors’ performance from the perspective of inefficient investment
Duo Shang
Dongliang Yuan
Dehui Li
Libo Fan
Sažetak
Geoeconomics has attracted sustained attention in recent years,
but the role of independent directors’ geographic distance in
investment efficiency remains unexplored. We explore the governance
effects of independent directors from a geographic location
perspective. Specifically, the Great Circle Distance Formula is
employed to calculate the geographic distance between the independent
directors and the enterprise. Then, we measure the inefficient
investment. Using a detailed sample in the Chinese market
from 2009 to 2018, we find that geographic distance is not conducive
to the functioning of independent directors and that there is a
positive relationship between independent directors’ geographic
distance and inefficient investment. The coefficients are robust to
multiple robustness checks. In addition, the positive effect of independent
directors’ geographic distance on inefficient investment
will increase (become more positive) when there is no high-speed
rail and the marketisation process is low in the enterprise’s location.
Mechanism tests show that geographic distance does affect inefficient
investment by inhibiting independent directors’ access to
information as well as their reputation. Our results have important
implications for investment policy and corporate governance.
Ključne riječi
Independent directors; geographic distance; highspeed rail; marketisation process; inefficient investments
Hrčak ID:
306782
URI
Datum izdavanja:
30.4.2023.
Posjeta: 233 *