An analysis of the association between firms' investment opportunities, board composition, and firm performance

Hutchinson, Marion R. (2002) An analysis of the association between firms' investment opportunities, board composition, and firm performance. Asia-Pacific Journal of Accounting and Economics, 9(1), pp. 17-38.

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The purpose of this paper is to identify the variables that influence the board structure adopted by firms and the subsequent relationship to the firm's performance. The results of this study of 229 Australain firms show that firms' investment opportunities are strongly associated with a higher proportion of executive directors ("EDs") on the board. The results also show that the negative relationship between a firm's investment opportunity set ("IOS") and firm performance is weakened at higher levels of non-executive director board domination. These results have implications for policy setters and managers of firms with investment opportunities.

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ID Code: 13664
Item Type: Journal Article
Refereed: Yes
Additional Information: For more information, please refer to the journal's website (see hypertext link) or contact the author.
Additional URLs:
Keywords: agency theory, corporate governance, investment opportunity set, firm performance
ISSN: 1608-1625
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2002 City University of Hong Kong
Deposited On: 04 Jun 2008 00:00
Last Modified: 05 Jan 2011 13:37

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