Structure of the board of directors and financial performance in emerging markets of Latin American: Evidence from Brazil, Chile, and Mexico
DOI:
https://doi.org/10.18046/j.estger.2020.156.3739Keywords:
corporate governance, board of directors, gender board composition, financial performance, Latin AmericaAbstract
This paper analyzes the impact of four attributes of the board of directors on the performance of 101 non-financial companies from Brazil, Chile, and Mexico, during the period 2011-2017. In addition, this research innovates by exploring the lagged effect of the above attributes in order to address the inverse causation that has been highlighted in the literature. The estimation of static and dynamic panel-data models reveals a positive effect of board independence on the accounting performance of the Brazilian and Chilean firms. The evidence reported is mixed in terms of the CEO duality, whereas a positive, quadratic, and concave relationship was found for board size. Finally, no supporting evidence that gender diversity results in a higher current and future performance of Latin American companies was found.
Downloads
References
Abdullah, S. N., Ismail, K. N. I. K., y Nachum, L. (2016). Does having women on boards create value? The impact of societal perceptions and corporate governance in emerging markets. Strategic Management Journal, 37(3), 466-476. https://doi.org/10.1002/smj.2352
Al-Manaseer, M. F., Al-Hindawi, R. M., Al-Dahiyat, M. A., y Sartawi, I. I. (2012). The impact of corporate governance on the performance of Jordanian banks. European Journal of Scientific Research, 67(3), 349-359.
Alabdullah, T. T. Y. (2016). Are board size and ownership structure beneficial in emerging markets’ firms? Evidence from Jordan. International Journal of Management & Information Systems, 20(3), 87-94. https://doi.org/10.19030/ijmis.v20i3.9752
Ararat, M., Aksu, M., y Cetin, A. T. (2015). How board diversity affects firm performance in emerging markets: Evidence on channels in controlled firms. Corporate Governance: An International Review, 23(2), 83-103. https://doi.org/10.1111/corg.12103
Arellano, M., y Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297. https://doi.org/10.2307/2297968
Arellano, M., y Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51. https://doi.org/10.1016/0304-4076(94)01642-D
Baliga, B. R., Moyer, R. C., y Rao, R. S. (1996). CEO duality and firm performance: What’s the fuss? Strategic Management Journal, 17(1), 41-43. https://doi.org/10.1002/(SICI)1097-0266(199601)17:1<41::AID-SMJ784>3.0.CO;2-%23
Barroso-Castro, C., Villegas-Periñan, M. M., y Pérez-Calero, L. (2010). ¿Son efectivos los consejos de administración? La eficacia del consejo y los resultados de la empresa. Investigaciones Europeas de Dirección y Economía de la Empresa, 16(3), 107-126. https://doi.org/10.1016/S1135-2523(12)60037-9
Bart, C., y McQueen, G. (2013). Why women make better directors. International Journal of Business Governance and Ethics, 8(1), 93-99. https://doi.org/10.1504/IJBGE.2013.052743
Biblioteca del Congreso Nacional de Chile (2019). Ley No. 20.382, 2009, Introduce perfeccionamientos a la normativa que regula los Gobiernos Corporativos de las empresas. Recuperado el 6 de junio de 2019, de: http://bcn.cl/1uzc6
Black, B., y Kim, W. (2012). The effect of board structure on firm value: A multiple identification strategies approach using Korean data. Journal of Financial Economics, 104(1), 203-226. https://doi.org/10.1016/j.jfineco.2011.08.001
Blundell, R., y Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143. https://doi.org/10.1016/S0304-4076(98)00009-8
Bozec, R., y Dia, M. (2015). Governance practices and firm performance: Does shareholders’ proximity to management matter. International Journal of Disclosure and Governance, 12(3), 185-209. https://doi.org/10.1057/jdg.2014.3
Briano-Turrent, G. del C., y Rodríguez-Ariza, L. (2016). Corporate governance ratings on listed companies: An institutional perspective in Latin America. European Journal of Management and Business Economics, 25(2), 63-75. https://doi.org/10.1016/j.redeen.2016.01.001
Briano-Turrent, G. del C., y Saavedra García, M. L. (2015). La composición del consejo de administración y la estructura accionaria como factores explicativos de la transparencia en el gobierno corporativo en Latinoamérica: evidencia en empresas cotizadas de Argentina, Brasil, Chile y México. Estudios Gerenciales, 31(136), 275-286. https://doi.org/10.1016/j.estger.2015.02.001
Carter, D. A., D’Souza, F., Simkins, B. J., y Simpson, W. G. (2010). The gender and ethnic diversity of US boards and board committees and firm financial performance. Corporate Governance: An International Review, 18(5), 396-414. https://doi.org/10.1111/j.1467-8683.2010.00809.x
Chapple, L., y Humphrey, J. E. (2014). Does board gender diversity have a financial impact? Evidence using stock portfolio performance. Journal of Business Ethics, 122(4), 709-723. https://doi.org/10.1007/s10551-013-1785-0
Comissão de Valores Mobiliários (2017). Instrução CVM no 586, de 8 de junho de 2017. Altera e acrescenta dispositivos à Instrução CVM no480, de 7 de dezembro de 2009. Diário Oficial Da União: Brasília, DF 10.
Consejo Coordinador Empresarial (2018). Código de Principios y Mejores Prácticas de Gobierno Corporativo: México. Recuperado el 6 de junio de 2019, de: https://bit.ly/35E6oXj
Donaldson, L., y Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49-68. https://doi.org/10.1177/031289629101600103
Fama, E. F., y Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301-325. https://doi.org/10.1086/467037
Fernández, M. R., Fernández, S., y Rodríguez, J. (2013). Estructura del consejo de administración y rendimiento de la empresa española cotizada. Revista Europea de Dirección y Economía de la Empresa, 22(3), 155-168. https://doi.org/10.1016/j.redee.2012.10.002
Haslam, S. A., Ryan, M. K., Kulich, C., Trojanowski, G., y Atkins, C. (2010). Investing with prejudice: The relationship between women’s presence on company boards and objective and subjective measures of company performance. British Journal of Management, 21(2), 484-497. https://doi.org/10.1111/j.1467-8551.2009.00670.x
Huang, C., y Ho, Y. (2011). Historical research on corporate governance: A bibliometric analysis. African Journal of Business Management, 5(2), 276- 284. https://doi.org/10.5897/AJBM09.368
Interagentes (2016). Código brasileiro de governança corporativa. Instituto Brasileiro de Governança Corporativa-IBGC.
Jensen, M. C., y Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
Klapper, L. F., y Love, I. (2004). Corporate governance, investor protection, and performance in emerging markets. Journal of Corporate Finance, 10(5), 703-728. https://doi.org/10.1016/S0929-1199(03)00046-4
Kiel, G. C., y Nicholson, G. J. (2003). Board composition and corporate performance: How the Australian experience informs contrasting theories of corporate governance. Corporate Governance: An International Review, 11(3), 189-205. https://doi.org/10.1111/1467-8683.00318
King-Domínguez, A., Améstica-Rivas, L., Moraga, V., y Arévalo, M. (2018). Influencia del Consejo de Administración en el desempeño de las empresas chilenas. Opción, 34(87), 50-71.
Lehn, K. M., Patro, S., y Zhao, M. (2009). Determinants of the size and composition of US corporate boards: 1935-2000. Financial Management, 38(4), 747-780. https://doi.org/10.1111/j.1755-053X.2009.01055.x
Merendino, A., y Melville, R. (2019). The board of directors and firm performance: Empirical evidence from listed companies. Corporate Governance, 19(3), 508-551. https://doi.org/10.1108/CG-06-2018-0211
Mukarram, S. S., Saeed, A., Hammoudeh, S., y Raziq, M. M. (2018). Women on Indian boards and market performance: A role-congruity theory perspective. Asian Business & Management, 17(1), 4-36. https://doi.org/10.1057/s41291-018-0030-1
Muth, M. M., y Donaldson, L. (1998). Stewardship theory and board structure: A contingency approach. Corporate Governance: An International Review, 6(1), 5-28. https://doi.org/10.1111/1467-8683.00076
Nicholson, G. J., y Kiel, G. C. (2007). Can directors impact performance? A case-based test of three theories of corporate governance. Corporate Governance: An International Review, 15(4), 585-608. https://doi.org/10.1111/j.1467-8683.2007.00590.x
Pavić-Kramarić, T., Aleksic, A., y Pejic-Bach, M. (2018). Measuring the impact of board characteristics on the performance of Croatian insurance companies. International Journal of Engineering Business Management, 10, 1-13. https://doi.org/10.1177/1847979018765864
Pfeffer, J., y Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York: Harper & Row.
Pucheta-Martínez, M. C. (2015). El papel del Consejo de Administración en la creación de valor en la empresa. Revista de Contabilidad, 18(2), 148-161. https://doi.org/10.1016/j.rcsar.2014.05.004
Rashid, A. (2018). Board independence and firm performance: Evidence from Bangladesh. Future Business Journal, 4(1), 34-49. https://doi.org/10.1016/j.fbj.2017.11.003
Roodman, D. (2009). How to do xtabond2: An introduction to Difference and System GMM in Stata. The Stata Journal, 9(1), 86-136. https://doi.org/10.1177/1536867X0900900106
Smith, N., Smith, V., y Verner, M. (2006). Do women in top management affect firm performance? A panel study of 2,500 Danish firms. International Journal of Productivity and Performance Management, 55(7), 569-593. https://doi.org/10.1108/17410400610702160
Uadiale, O. M. (2010). The impact of board structure on corporate financial performance in Nigeria. International Journal of Business and Management, 5(10), 155-166. http://dx.doi.org/10.5539/ijbm.v5n10p155
Vieira, E. S. (2018). Board of directors characteristics and performance in family firms and under the crisis. Corporate Governance, 18(1), 119-142. https://doi.org/10.1108/CG-01-2017-0010
Villanueva-Villar, M., Rivo-López, E., y Lago-Peñas, S. (2016). On the relationship between corporate governance and value creation in an economic crisis: Empirical evidence for the Spanish case. Business Research Quarterly, 19(4), 233-245. https://doi.org/10.1016/j.brq.2016.06.002
Wintoki, M. B., Linck, J. S., y Netter, J. M. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105, 581-606. https://doi.org/10.1016/j.jfineco.2012.03.005
Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185-211. https://doi.org/10.1016/0304-405X(95)00844-5
Zegers, M., y Consiglio, J. (2013). Gobierno corporativo en Latinoamérica: Un análisis comparativo entre Brasil, Chile, Colombia y México. Centro de Gobierno Corporativo, Pontificia Universidad Católica de Chile, Santiago, Chile.
Downloads
Published
Issue
Section
License
Articles are the sole responsibility of their authors, and will not compromise Icesi’s University principles or policies nor those of the Editorial Board of the journal Estudios Gerenciales. Authors authorize and accept the transfer of all rights to the journal, both for its print and electronic publication. After an article is published, it may be reproduced without previous permission of the author or the journal but the author(s), year, title, volume, number and range of pages of the publication must be mentioned. In addition, Estudios Gerenciales must be mentioned as the source (please, refrain from using Revista Estudios Gerenciales).
How to Cite
