Research On The Economic Consequences Of AcademicIndependent Directors’ Appointment

Whether the independent director system is effective has always been a hot topic of debate in the academic and practical circles.Since the introduction of the independent director system in my country,related negative events and news have been common,such as "high-priced independent directors","independent directors are not independent",and "independent directors do not understand".Negative comments such as these are often found in newspapers and magazines,and independent directors are often referred to as "rubber stamps" or "vases" for failing to perform their corresponding supervisory duties.The wave of independent directors leaving colleges and universities in 2015 has attracted the attention of independent directors with academic backgrounds(hereinafter referred to as "independent academic directors")who have work experience in universities or research institutes.In fact,independent academic directors occupy the majority of listed companies in my country A considerable percentage,however,do their academic backgrounds facilitate the performance of an independent director’s oversight or advisory function? In recent years,this issue has attracted great attention from the academic and practical circles.On the one hand,compared with other types of independent directors,academic independent directors are usually regarded as possessing higher theoretical literacy and professional knowledge,and can put forward highly professional and independent opinions and suggestions on the board of directors,thereby helping to enhance corporate value.On the other hand,academic independent directors often lack rich business experience,which may make it difficult to apply their professional knowledge to the company’s business practice,thus affecting the performance of their supervision and consulting functions,and eventually becoming a knowledge-based "vase".Therefore,whether academic independent directors can use their academic background and academic experience to effectively perform their supervisory or consulting functions and create value for enterprises is a major topic in the field of corporate governance in my country,and it is worthy of systematic research.This thesis manually collects the academic background data of all independent directors of listed companies in the A-share market from 2004 to 2019,and further distinguishes the professional backgrounds of academic independent directors,focusing on examining the investment and innovation of academic independent directors with different professional backgrounds in enterprises.On this basis,the ultimate impact of academic independent directors on corporate value is discussed in depth.In general,the empirical research content of this thesis can be summarized as follows: In Chapter 4 of this thesis,firstly,the market reaction to the resignation event of academic independent directors is examined by using the event research method,and from this unique perspective,it is preliminarily tested that academic independent directors are important to enterprises.Whether it is valuable or not,secondly,it further differentiates the personal characteristics and professional background of the independent academic directors to explore what personal characteristics and professional backgrounds of the independent academic directors influence the market reaction.;In Chapter5 of this thesis,firstly,from the perspective of corporate investment,we examine whether academic independent directors can perform their supervisory functions;secondly,we further examine the impact of academic independent directors with different professional backgrounds on corporate over-investment and its impact mechanism;The heterogeneity of the supervision function of academic independent directors;in Chapter 6 of this thesis,focusing on the consulting function of academic independent directors,we focus on examining the impact of academic independent directors with background in science and engineering on enterprise innovation and its impact mechanism,and further examine its impact on corporate innovation.Heterogeneous effects.The main conclusions of this thesis are as follows: First,the market reaction of the A-share market to the resignation of independent academic directors is significantly negative,implying that the market believes that independent academic directors are of great value to the company in which they work,and that the resignation of independent academic directors will lead to a decline in the value of the company.The independent director is not a "vase" role.Further research found that the market response to the resignation of female independent academic directors and academic directors with high reputation is more negative,and the market response to the resignation of independent academic directors in private enterprises with higher supervision needs and the resignation of academic independent directors with a short tenure in business background is more negative.In order to be negative,the market reaction of independent academic directors who work in R&D enterprises with higher consulting needs and academic directors with stronger consulting ability overseas who have a science and engineering background is more negative.It is found that the appointment of an academic independent director with a business background is significantly negatively correlated with the company’s over-investment,that is,the appointment of an academic independent director with a business background can inhibit the over-investment of enterprises,and the effect is more significant in state-owned enterprises.Characteristics such as Dong’s reputation and whether he is a local employee also have a significant impact on corporate overinvestment.Second,the mechanism test found that the more diligent participation of independent academic directors with business backgrounds in board meetings is an important mechanism for exerting their supervisory functions;Significantly promotes corporate innovation.The higher the proportion of independent directors appointed by the company in science and engineering,the more conducive to corporate innovation.A series of robustness tests and endogeneity tests show that the conclusion is still robust.The mechanism test found that The independent academic director of science and engineering is to provide a consulting role for enterprise innovation by exerting a high human capital effect,and can use its social resources to promote the industry-universityresearch cooperation between enterprises and universities or research institutes to promote enterprise innovation.In addition,further research found that the higher the innovation atmosphere in the industry,the more conducive it is for the independent directors of science and engineering to play the consulting function of promoting enterprise innovation..The research of this thesis is innovative to a certain extent,and its academic value and policy value mainly include: First,this thesis systematically discusses the influence of academic independent directors on company value,which makes up for the deficiencies of the existing research literature on academic independent directors to a certain extent.In addition,the research on the mechanism of academic independent directors affecting corporate value has important reference value for listed companies to hire academic independent directors.Second,it enriches the literature on corporate overinvestment and the economic consequences of academic independent directors with business backgrounds.At present,few literatures specifically discuss the influence of academic independent directors on the company’s overinvestment.This thesis provides a new perspective for related research,enriches and expands the relevant research literature of academic independent directors,and to a certain extent makes up for domestic and foreign research on academic independence.The lack of research on Dong’s governance function(supervision function);thirdly,it enriches the research on corporate innovation and the economic consequences of independent directors with a background in science and engineering.At present,there are few literatures devoted to discussing the influence of academic independent directors on enterprise innovation with a background of science and engineering.Finally,the study of this thesis also implies that professionals with academic backgrounds serving as independent directors can create value for enterprises,which to a large extent clarifies the social doubts about the role of independent directors as "vase".It also provides a reference for the policy frequently proposed in recent years to encourage high-level academic talents to work part-time in enterprises and promote the deep integration of Enterprise-University-Research Institute.