Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Winter 2021
  • Article
  • Contemporary Accounting Research

Can Staggered Boards Improve Value? Causal Evidence from Massachusetts

By: Robert Daines, Shelley Xin Li and Charles C.Y. Wang
  • Format:Print
ShareBar

Abstract

We study the effect of staggered boards (SBs) using a quasi-experiment: a 1990 law that imposed an SB on all Massachusetts-incorporated firms. The law led to an increase in Tobin's Q, investment in CAPEX and R&D, patents, higher-quality patented innovations, and resulted in higher profitability. These effects are concentrated at innovating firms, especially those facing greater Wall Street scrutiny. An increase in institutional and dedicated investors also accompanied the imposition of SBs, facilitating a longer-term orientation. The evidence suggests that early-life-cycle firms facing high information asymmetries benefit from SBs by allowing managers to focus on long-term investments and innovations.

Keywords

Staggered Board; Entrenchment; Life-cycle; Tobin's Q; Innovation; Profitability; Investor Composition; Governing and Advisory Boards; Investment; Innovation and Invention; Institutional Investing; Value

Citation

Daines, Robert, Shelley Xin Li, and Charles C.Y. Wang. "Can Staggered Boards Improve Value? Causal Evidence from Massachusetts." Contemporary Accounting Research 38, no. 4 (Winter 2021): 3053–3084.
  • SSRN
  • Find it at Harvard

About The Author

Charles C.Y. Wang

Accounting and Management
→More Publications

More from the Authors

    • January 2023
    • Faculty Research

    Identifying Quality Stocks using Quantitative Screens

    By: Charles CY Wang and Johnson Elugbadebo
    • August 10, 2022
    • Wall Street Journal

    The Virtues of Stock Buybacks

    By: Jesse M. Fried and Charles C.Y. Wang
    • Journal of Financial Economics

    How Much Should We Trust Staggered Difference-In-Differences Estimates?

    By: Andrew C. Baker, David F. Larcker and Charles C.Y. Wang
More from the Authors
  • Identifying Quality Stocks using Quantitative Screens By: Charles CY Wang and Johnson Elugbadebo
  • The Virtues of Stock Buybacks By: Jesse M. Fried and Charles C.Y. Wang
  • How Much Should We Trust Staggered Difference-In-Differences Estimates? By: Andrew C. Baker, David F. Larcker and Charles C.Y. Wang
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College