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Business Organizations Law

Cornell University Law School

1998

Board-size effect

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Full-Text Articles in Law

Larger Board Size And Decreasing Firm Value In Small Firms, Theodore Eisenberg, Stefan Sundgren, Martin T. Wells Apr 1998

Larger Board Size And Decreasing Firm Value In Small Firms, Theodore Eisenberg, Stefan Sundgren, Martin T. Wells

Cornell Law Faculty Publications

Several studies hypothesize a relation between board size and financial performance. Empirical tests of the relation exist in only a few studies of large U.S. firms. We find a significant negative correlation between board size and profitability in a sample of small and midsize Finnish firms. Finding a board-size effect for a new and different class of firms affects the range of explanations for the board-size effect.