Board structure and firm technical efficiency: Evidence from Canadian state-owned enterprises [An article from: European Journal of Operational Research]

This digital document is a journal article from European Journal of Operational Research, published by Elsevier in 2007. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
The objective of the study is to analyze the board-performance relationship for a group of 14 Canadian SOEs. This context is unique because SOEs do not have major control devices other than the board. As the interaction effect, if any, between the board and other corporate governance structures is expected to be low, we do not have to fully control for the potential impact of different control devices, or to disentangle them completely from influencing board composition. The performance is also measured using data envelopment analysis (DEA), a linear programming method used for the first time in this research area. As such, this study contributes to the operational research literature while applying DEA method to untraditional fields of research. The results from the multivariate analysis suggest that board size and board independence are positively related to firm technical efficiency only when SOEs are exposed to market discipline. In other words, product market competition is a precondition for boards to be effective.