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Does board size matters? New evidence from a two-tier board system / Salim Darmadi

The objective of this study is to examine the association between board size and firm value using the setting of a developing economy that adopts a two-tier board system. Hence, the present study extends the existing literature which heavily focuses on economies adopting unitary board structure. Em...

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Main Author: Darmadi, Salim
Format: Article
Language:English
Published: Accounting Research Institute (ARI), Faculty of Accountancy & UiTM Press 2014
Subjects:
Malaysia
Online Access:http://ir.uitm.edu.my/id/eprint/13676/1/AJ_SALIM%20DARMADI%20MAR%2014.pdf
http://ir.uitm.edu.my/id/eprint/13676/
https://mar.uitm.edu.my/
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spelling my.uitm.ir.136762016-06-30T09:22:44Z http://ir.uitm.edu.my/id/eprint/13676/ Does board size matters? New evidence from a two-tier board system / Salim Darmadi Darmadi, Salim Malaysia The objective of this study is to examine the association between board size and firm value using the setting of a developing economy that adopts a two-tier board system. Hence, the present study extends the existing literature which heavily focuses on economies adopting unitary board structure. Employing a sample of non-financial companies listed on the Indonesia Stock Exchange (IDX), we perform regression analyses separately for the supervisory board and the management board. Using return on assets (ROA) and Tobin sQas measures of firm value, our results support the proposition that board size and firm value are positively associated. Across different models and estimation techniques, the relationship of board size to Tobin's Q is more robust than that to ROA. Our further analysis also reveals that larger board size is more likely to be employed by larger firms, which benefit from having larger boards. It is suggested that listed companies need to carefully arrange their board structure in their efforts to maximize firm value. Accounting Research Institute (ARI), Faculty of Accountancy & UiTM Press 2014 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/13676/1/AJ_SALIM%20DARMADI%20MAR%2014.pdf Darmadi, Salim (2014) Does board size matters? New evidence from a two-tier board system / Salim Darmadi. Malaysian Accounting Review, 13 (1). pp. 45-73. ISSN 1675-4077 https://mar.uitm.edu.my/
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Malaysia
spellingShingle Malaysia
Darmadi, Salim
Does board size matters? New evidence from a two-tier board system / Salim Darmadi
description The objective of this study is to examine the association between board size and firm value using the setting of a developing economy that adopts a two-tier board system. Hence, the present study extends the existing literature which heavily focuses on economies adopting unitary board structure. Employing a sample of non-financial companies listed on the Indonesia Stock Exchange (IDX), we perform regression analyses separately for the supervisory board and the management board. Using return on assets (ROA) and Tobin sQas measures of firm value, our results support the proposition that board size and firm value are positively associated. Across different models and estimation techniques, the relationship of board size to Tobin's Q is more robust than that to ROA. Our further analysis also reveals that larger board size is more likely to be employed by larger firms, which benefit from having larger boards. It is suggested that listed companies need to carefully arrange their board structure in their efforts to maximize firm value.
format Article
author Darmadi, Salim
author_facet Darmadi, Salim
author_sort Darmadi, Salim
title Does board size matters? New evidence from a two-tier board system / Salim Darmadi
title_short Does board size matters? New evidence from a two-tier board system / Salim Darmadi
title_full Does board size matters? New evidence from a two-tier board system / Salim Darmadi
title_fullStr Does board size matters? New evidence from a two-tier board system / Salim Darmadi
title_full_unstemmed Does board size matters? New evidence from a two-tier board system / Salim Darmadi
title_sort does board size matters? new evidence from a two-tier board system / salim darmadi
publisher Accounting Research Institute (ARI), Faculty of Accountancy & UiTM Press
publishDate 2014
url http://ir.uitm.edu.my/id/eprint/13676/1/AJ_SALIM%20DARMADI%20MAR%2014.pdf
http://ir.uitm.edu.my/id/eprint/13676/
https://mar.uitm.edu.my/
_version_ 1685648423757283328
score 13.211869

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