Board of Diretor Education and Firm Performance: a Dynamic Approach

Abstract

I examine the relationship between board of director's (BoD) education and firm performance on a European dataset over the period from 1999 to 2013, employing a well-developed dynamic panel generalized method of moments (GMM) estimator to alleviate endogeneity issue in corporate governance study. I find no correlation between BoD education and firm's return on asset, after accounting for endogeneity issues. All else equal, firms with better educated board of director may appear to have better performance in the short-run, but that superiority will likely to reverse in the future.