Company financial performance: Does board size matter? Case of the EUROSTOXX50 index
[EN] This study analyzes the relationship between board size and economic-financial performance in a sample of European firms that constitute the EUROSTOXX50 Index. Based on previous literature, resource dependency and agency theories, and considering regulation developed by the OECD and European Un...
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| Formato: | artículo |
| Fecha de publicación: | 2015 |
| País: | España |
| Recursos: | Universidad del País Vasco |
| Repositorio: | Addi. Archivo Digital para la Docencia y la Investigación |
| OAI Identifier: | oai:addi.ehu.eus:10810/15777 |
| Acesso em linha: | http://hdl.handle.net/10810/15777 |
| Access Level: | acceso abierto |
| Palavra-chave: | corporate governance board size ROA ROE Tobin´s Q EUROSTOXX50 index gobierno corporativo tamaño del consejo de administración Q de Tobin índice EUROSTOXX 50 M21 G34 BUSINESS AND INTERNATIONAL MANAGEMENT BUSINESS ADMINISTRATION AND BUSINESS ECONOMICS MARKETING ACCOUNTING FINANCIAL ECONOMICS ECONOMICS INDUSTRIAL RELATIONS AND LABOR ORGANIZATIONAL BEHAVIOR AND HUMAN RESOURCE MANAGEMENT STRATEGY AND MANAGEMENT |
| Resumo: | [EN] This study analyzes the relationship between board size and economic-financial performance in a sample of European firms that constitute the EUROSTOXX50 Index. Based on previous literature, resource dependency and agency theories, and considering regulation developed by the OECD and European Union on the normative of corporate governance for each country in the sample, the authors propose the hypotheses of both positive linear and quadratic relationships between the researched parameters. Using ROA as a benchmark of financial performance and the number of members of the board as measurement of the board size, two OLS estimations are performed. To confirm the robustness of the results the empirical study is tested with two other similar financial ratios, ROE and Tobin s Q. Due to the absence of significant results, an additional factor, firm size, is employed in order to check if it affects firm performance. Delving further into the nature of this relationship, it is revealed that there exists a strong and negative relation between firm size and financial performance. Consequently, it can be asseverated that the generic recommendation one size fits all cannot be applied in this case; which conforms to the Recommendations of the European Union that dissuade using generic models for all countries. |
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