The market for non-executive directors: Does acquisition performance influence future board seats?

This paper investigates whether non-executive directors associated with good (bad) board decisions are subsequently rewarded (penalized) in the market for directors. This question is addressed by assessing whether the post-acquisition performance of acquiring companies influences the number of non-executive directorships that non-executives involved in these acquisitions hold subsequent to the acquisition. We find that non-executives on the boards of acquirers that increase (omit or cut) their dividend subsequently hold more (fewer) non-executive directorships in listed companies. Our findings suggest that the non-executive labor market is efficient and rewards (penalizes) non-executives for good (bad) acquisitions

Endogeneity: how failure to correct for it can cause wrong inferences and some remedies

Although researchers in business and management are becoming increasingly aware of the importance of endogeneity affecting regression analysis, they frequently do not have the right methodological toolkit to adjust for this issue. This paper discusses such a toolkit. There are also areas in business and management research which to date seem to be mostly oblivious about the endogeneity issue. This paper highlights such an area, which studies the question as to whether firms that are cross-listed on a foreign stock exchange are charged premium fees by their auditors. When the same methodology (pooled ordinary least squares) as in the existing literature is used, the existence of an audit fee premium for cross-listed firms seems to be confirmed. However, once methodologies are used which adjust for the various types of endogeneity (i.e. omitted variable bias, simultaneous and dynamic endogeneity) there is no longer support for the existence of such a generalised premium. Hence, this paper not only illustrates that failure to adjust for endogeneity has severe consequences such as drawing the wrong inferences, but it also reviews various ways to control for the different types of endogeneity

Sovereign wealth funds, productivity and people: The impact of Norwegian government pension fund - global investments in the UK

Sovereign Wealth Funds (SWFs) have an increasing presence in the global financial ecosystem, principally through their investments in equities, which, in turn, may influence HRM. This study examines the influence of the world’s largest SWF, the Norwegian Government Pension Fund-Global (NGPF-G), on employment in its UK investee firms. We find that firms with NGPF-G investment are significantly less likely to reduce their demand for labour, more specifically in the immediate aftermath of the 2008 financial crisis. When a drop in the demand for labour does occur, it is less extreme when compared to similar organizations without a NGPF-G shareholding, and this is evident even in the case of relatively small NGPF-G investments. These findings are in line with the fund’s objective of promoting corporate sustainability and Norwegian values. We draw out the key implications of our findings for HR practice