Research Seminar on “Impact of Board Composition and Entrepreneurial Intentions”

Anna Grosman, Assistant Professor, Economics, Finance & Entrepreneurship Group, Aston Business School

 “The Good, the Great and the Independent: the Impact of Board Composition on Investment Behavior”

 Abstract: In many countries with a weak institutional environment and constrained resources, firms face underinvestment due to the diversion of resources away from productive investment opportunities, or tunneling. We examine how the composition of the board of directors can supplant this problem of institutional voids by facilitating business groups and state-owned enterprises (SOEs) to invest in productive assets. Using unique panel data from Russian publicly traded firms, where the government and oligarchs are predominant shareholders, we find a positive effect of cash-flows, or internally generated resources, on capital expenditures when SOEs appoint independent board directors to assume the role of monitoring. However, these positive effects are substantially reduced when oligarchs appoint independent directors indicating that independent directors are afforded the least autonomy to play their monitoring role. We find foreign independent directors to be influential, while foreign non-executive directors exercise little influence on tunneling. Local firms controlled by foreign investors systematically appoint independent directors as an alternative institutional arrangement to compensate for an institutional void. We reinforce these findings by showing that firms cope with institutional void by going to markets "devoid of void": either by listing or operating in such markets. For foreign listed firms or MNEs, there is more benefit from having a higher proportion of independent directors than for locally listed firms or non-MNEs.

 Ekaterina Aleksandrova, Junior Research Fellow, International Centre for Health Economics, Management and Policy, St. Petersburg School of Economics and Management

“Entrepreneurial Intentions in Russia: An Empirical Study”

Abstract: The paper investigates what factors influence entrepreneurial intentions in Russia. The share of Russian adult population who did not have any business and had intentions to create a business was as low as 2.6%. According to the planned behavior theory there are three components that determine entrepreneurial intentions: personal attitude toward entrepreneurial activity which determines a positive decision about starting a business; subjective norms which reflect other people’s approval of one becoming an entrepreneur; perceived behavioral control measured as whether one thinks that it would be easy or difficult to start a business. The empirical analysis is based on Global Entrepreneurship Monitor (GEM) data for the year 2013. The models of binary choice are applied to discover the factors that affect entrepreneurial intentions. The results demonstrate that it is hard to predict intentions using only socio-demographic characteristics. The most important factors are: the perception of having the required knowledge and skills for starting a business; being acquainted with someone who has started a business; past entrepreneurial experience; assessment of how favorable the environment is for starting a business in the locality where the respondent lives.

Venue: Kantemirovskaya st., 3a, room 356

Pass can be ordered by:

Phone: 8(911)999-53-60

e-mail: lipatnikov@hse.ru

contact: Lipatnikov Vitalii