The Brain Gain of Corporate Boards: Evidence from China
July 23, 2014
We study the impact of directors with foreign experience on firm
performance in emerging markets. Using a unique data set from China, we
exploit the introduction of policies to attract talented emigrants and
increase the supply of individuals with foreign experience in different
provinces at different times. We document that performance increases
after firms hire directors with foreign experience and identify the
channels through which the emigration of talent may lead to a brain
gain. Our findings provide evidence on how directors transmit knowledge
about management practices and corporate governance to firms in emerging
markets.