Abstract

This study investigates whether board structure has a significant effect on firm performance, and whether board structure matters more or less in U.S. firms than in Chinese firms. This study hypothesized a positive relationship between board structure and firm performance and that board structure affects firm performance differently in Chinese firms than in U.S. firms. Economic theory is applied to the relationship between board structure and firm performance. Significant theories including profit maximization within firms and CEO conflict of interests, which predict the potential mechanisms for the effect of board structure on firm performance help us understand why we care about this topic. Data from Mergent Online and LexisNexis Academic database in fiscal year 2014 is used and 188 firms are selected in the study. Empirically, the results turn out to be insignificant for the most part, showing that there is no significant difference between how board structure affects firm performance in U.S. firms and Chinese firms when board structure is measured as board size or ratio of outsider. There is weak evidence showing that board size is negatively related to firm performance. However, it shows that CEO duality is more important for U.S. firms than Chinese firms. In terms of the variable country* CEO duality, my hypothesis that board structure matters differently in U.S. firms and Chinese firms is supported. Overall, there is weak evidence showing that board structure affects firm performance differently in Chinese and U.S. firms.

Advisor

Sell, John

Department

Business Economics

Disciplines

Business Administration, Management, and Operations | Business and Corporate Communications | Organizational Behavior and Theory

Keywords

Board Structure, Firm Performance, Chinese firms

Publication Date

2016

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2016 Yanli Xiong