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EFFECT OF CORPORATE GOVERNANCE ON THE FIRMS’ STRUCTURAL CAPITAL

Karima Dhaouadi

DOI: 10.22495/cbv7i2c1art3

Abstract

The study seeks to understand how the firm‟s ownership structure and the board of directors‟ composition influence the structural capital. The latter is apprehended by three main levers: TMT compensation, innovation, and firm‟s reputation. By mobilizing several panel linear regressions on 274 American firms, the results show that the firms which heavily invest in structural capital are more successful and chaired by the younger and heterogeneous TMT. No disciplinary effect of the board on structural capital has been found. The results support the cognitive theory assumptions. The classic perspective failed to explain the structural capital phenomena. In order to enhance their structural capital, firms must pay a close attention to their board cognitive contribution and not to its disciplinary role.

Keywords: Corporate Governance, Structural Capital, TMT Compensation, Innovation, Reputation

How to cite this paper: Dhaouadi, K. (2011). Effect of corporate governance on the firms’ structural capital. Corporate Board: role, duties and composition, 7(2-1), 25-39. http://doi.org/10.22495/cbv7i2c1art3

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