earticle

영어

Using manually collected biographical information on independent directors in target firms, we analyze the role of directors with doctoral degrees in mergers and acquisitions between 2005 and 2014. We first observe that doctoral independent directors serve on the boards of about 68% of target firms. We find that the market differently responds to the existence of doctoral independent directors with two distinct disciplines during the M&A announcements. While doctoral directors with business-related backgrounds are negatively associated with shareholder wealth, those with technology-related backgrounds tend to increase shareholder wealth. Interestingly, our empirical results show that doctoral independent directors with business-related degrees improve shareholder wealth in targets with higher advisory needs. We also find that low monitoring intensive targets, which have greater monitoring needs than high monitoring intensive targets, benefit only from independent directors with technology-related degrees. Overall, our findings imply that doctoral independent directors can provide better advisory and monitoring service when their expertise is relevant to the firm’s need.