Topic:Innovation Diffusion in a Network of Corporate Boards
Lecturer:Re-Jin Guo, Professor, Department of Finance, University of Illinois at Chicago
Time: 15:30-17:00 p.m. 27th of November 2018（Tuesday）
Venue:B423, Zhixin Building
Abstract: Using a large panel data set of corporate directors of S&P 1500 firms over the period 1996 to 2010, we report that innovative firms with large patent portfolios are more central in the network of corporate boards. Directors serving on central boards and innovative firms are more likely to receive higher compensation and be hired as directors for other firms. We find that firms with increased centrality from adding directors inside the network are more likely to increase subsequent R&D activities and improve innovation capability, with robust results in experiments using exogenous shocks to board director hiring (SOX in 2002 and NYSE/NASD in 2003) and to patent application disclosure (American Inventor's Protection Act in 1999). Overall, the results are consistent with the hypothesis that information diffusion of innovation activities via shared director(s) can be a major determinant of the formation and dynamics of the network of corporate boards.