Director Co-option and the Cash Conversion Cycl
Author
Hampton, Jonathan Bradley
Abstract
This study examines whether co-opted directors degrade or improve working capital efficiency. We find strong evidence that firms with more co-opted boards exhibit lower cash conversion cycles and so are more efficient at managing working capital. After controlling for other factors, board co-option reduces the length of the cash conversion cycle by about -1.2%, whereas the co-option of independent directors reduces the cycle by nearly -2.0%. These results persist even after addressing endogeneity and are robust to alternate measures of the cash conversion cycle. In general, our study lends credence to the argument that co-option reduces managerial myopic behavior as it reduces the likelihood of dismissal and so motivates managers to make better investment decisions that may improve firm proficiency.
Subject
Date
2022-05-06
Citation:
APA:
Hampton, Jonathan Bradley.
(May 2022).
Director Co-option and the Cash Conversion Cycl
(Honors Thesis, East Carolina University). Retrieved from the Scholarship.
(http://hdl.handle.net/10342/10851.)
MLA:
Hampton, Jonathan Bradley.
Director Co-option and the Cash Conversion Cycl.
Honors Thesis. East Carolina University,
May 2022. The Scholarship.
http://hdl.handle.net/10342/10851.
July 12, 2024.
Chicago:
Hampton, Jonathan Bradley,
“Director Co-option and the Cash Conversion Cycl”
(Honors Thesis., East Carolina University,
May 2022).
AMA:
Hampton, Jonathan Bradley.
Director Co-option and the Cash Conversion Cycl
[Honors Thesis]. Greenville, NC: East Carolina University;
May 2022.
Collections
Publisher
East Carolina University